Correlation Between Nishi Nippon and Global Ship
Can any of the company-specific risk be diversified away by investing in both Nishi Nippon and Global Ship 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 Nishi Nippon and Global Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nishi Nippon Railroad Co and Global Ship Lease, you can compare the effects of market volatilities on Nishi Nippon and Global Ship 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 Nishi Nippon with a short position of Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nishi Nippon and Global Ship.
Diversification Opportunities for Nishi Nippon and Global Ship
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nishi and Global is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Nishi Nippon Railroad Co and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease and Nishi Nippon 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 Nishi Nippon Railroad Co are associated (or correlated) with Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of Nishi Nippon i.e., Nishi Nippon and Global Ship go up and down completely randomly.
Pair Corralation between Nishi Nippon and Global Ship
Assuming the 90 days horizon Nishi Nippon Railroad Co is expected to under-perform the Global Ship. But the stock apears to be less risky and, when comparing its historical volatility, Nishi Nippon Railroad Co is 1.29 times less risky than Global Ship. The stock trades about -0.16 of its potential returns per unit of risk. The Global Ship Lease is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 2,104 in Global Ship Lease on October 25, 2024 and sell it today you would lose (46.00) from holding Global Ship Lease or give up 2.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nishi Nippon Railroad Co vs. Global Ship Lease
Performance |
| Timeline |
| Nishi Nippon Railroad |
| Global Ship Lease |
Nishi Nippon and Global Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nishi Nippon and Global Ship
The main advantage of trading using opposite Nishi Nippon and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nishi Nippon position performs unexpectedly, Global Ship 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 Global Ship will offset losses from the drop in Global Ship's long position.| Nishi Nippon vs. Laureate Education | Nishi Nippon vs. G8 EDUCATION | Nishi Nippon vs. MOVIE GAMES SA | Nishi Nippon vs. IDP EDUCATION LTD |
| Global Ship vs. Chengdu PUTIAN Telecommunications | Global Ship vs. Wayside Technology Group | Global Ship vs. Cairo Communication SpA | Global Ship vs. Spirent Communications plc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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