Correlation Between FIRST SHIP and ANGANG STEEL
Can any of the company-specific risk be diversified away by investing in both FIRST SHIP and ANGANG STEEL at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining FIRST SHIP and ANGANG STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIRST SHIP LEASE and ANGANG STEEL H , you can compare the effects of market volatilities on FIRST SHIP and ANGANG STEEL and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in FIRST SHIP with a short position of ANGANG STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SHIP and ANGANG STEEL.
Diversification Opportunities for FIRST SHIP and ANGANG STEEL
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FIRST and ANGANG is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SHIP LEASE and ANGANG STEEL H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGANG STEEL H and FIRST SHIP is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on FIRST SHIP LEASE are associated (or correlated) with ANGANG STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGANG STEEL H has no effect on the direction of FIRST SHIP i.e., FIRST SHIP and ANGANG STEEL go up and down completely randomly.
Pair Corralation between FIRST SHIP and ANGANG STEEL
Assuming the 90 days horizon FIRST SHIP LEASE is expected to generate 1.53 times more return on investment than ANGANG STEEL. However, FIRST SHIP is 1.53 times more volatile than ANGANG STEEL H . It trades about 0.08 of its potential returns per unit of risk. ANGANG STEEL H is currently generating about 0.11 per unit of risk. If you would invest 1.70 in FIRST SHIP LEASE on November 2, 2024 and sell it today you would earn a total of 0.68 from holding FIRST SHIP LEASE or generate 40.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIRST SHIP LEASE vs. ANGANG STEEL H
Performance |
| Timeline |
| FIRST SHIP LEASE |
| ANGANG STEEL H |
FIRST SHIP and ANGANG STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST SHIP and ANGANG STEEL
The main advantage of trading using opposite FIRST SHIP and ANGANG STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SHIP position performs unexpectedly, ANGANG STEEL can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ANGANG STEEL will offset losses from the drop in ANGANG STEEL's long position.| FIRST SHIP vs. HUTCHISON TELECOMM | FIRST SHIP vs. Chesapeake Utilities | FIRST SHIP vs. Iridium Communications | FIRST SHIP vs. Spirent Communications plc |
| ANGANG STEEL vs. THORNEY TECHS LTD | ANGANG STEEL vs. Tradegate AG Wertpapierhandelsbank | ANGANG STEEL vs. GLG LIFE TECH | ANGANG STEEL vs. VELA TECHNOLPLC LS 0001 |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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