Correlation Between FIRST SHIP and WT OFFSHORE
Can any of the company-specific risk be diversified away by investing in both FIRST SHIP and WT OFFSHORE 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 WT OFFSHORE 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 WT OFFSHORE, you can compare the effects of market volatilities on FIRST SHIP and WT OFFSHORE 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 WT OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SHIP and WT OFFSHORE.
Diversification Opportunities for FIRST SHIP and WT OFFSHORE
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FIRST and UWV is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SHIP LEASE and WT OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT OFFSHORE 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 WT OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT OFFSHORE has no effect on the direction of FIRST SHIP i.e., FIRST SHIP and WT OFFSHORE go up and down completely randomly.
Pair Corralation between FIRST SHIP and WT OFFSHORE
Assuming the 90 days horizon FIRST SHIP LEASE is expected to generate 3.5 times more return on investment than WT OFFSHORE. However, FIRST SHIP is 3.5 times more volatile than WT OFFSHORE. It trades about 0.05 of its potential returns per unit of risk. WT OFFSHORE is currently generating about -0.06 per unit of risk. If you would invest 2.68 in FIRST SHIP LEASE on November 1, 2024 and sell it today you would lose (0.35) from holding FIRST SHIP LEASE or give up 13.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIRST SHIP LEASE vs. WT OFFSHORE
Performance |
| Timeline |
| FIRST SHIP LEASE |
| WT OFFSHORE |
FIRST SHIP and WT OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST SHIP and WT OFFSHORE
The main advantage of trading using opposite FIRST SHIP and WT OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SHIP position performs unexpectedly, WT OFFSHORE 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 WT OFFSHORE will offset losses from the drop in WT OFFSHORE's long position.| FIRST SHIP vs. Tradegate AG Wertpapierhandelsbank | FIRST SHIP vs. TRADEGATE | FIRST SHIP vs. MARKET VECTR RETAIL | FIRST SHIP vs. SALESFORCE INC CDR |
| WT OFFSHORE vs. PKSHA TECHNOLOGY INC | WT OFFSHORE vs. AAC TECHNOLOGHLDGADR | WT OFFSHORE vs. Playa Hotels Resorts | WT OFFSHORE vs. DALATA HOTEL |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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