Correlation Between Orient Overseas and FIRST SHIP
Can any of the company-specific risk be diversified away by investing in both Orient Overseas and FIRST 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 Orient Overseas and FIRST SHIP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orient Overseas Limited and FIRST SHIP LEASE, you can compare the effects of market volatilities on Orient Overseas and FIRST 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 Orient Overseas with a short position of FIRST SHIP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Overseas and FIRST SHIP.
Diversification Opportunities for Orient Overseas and FIRST SHIP
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Orient and FIRST is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Orient Overseas Limited and FIRST SHIP LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST SHIP LEASE and Orient Overseas 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 Orient Overseas Limited are associated (or correlated) with FIRST SHIP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST SHIP LEASE has no effect on the direction of Orient Overseas i.e., Orient Overseas and FIRST SHIP go up and down completely randomly.
Pair Corralation between Orient Overseas and FIRST SHIP
Assuming the 90 days trading horizon Orient Overseas Limited is expected to under-perform the FIRST SHIP. But the stock apears to be less risky and, when comparing its historical volatility, Orient Overseas Limited is 1.57 times less risky than FIRST SHIP. The stock trades about -0.39 of its potential returns per unit of risk. The FIRST SHIP LEASE is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 2.40 in FIRST SHIP LEASE on November 7, 2024 and sell it today you would lose (0.06) from holding FIRST SHIP LEASE or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orient Overseas Limited vs. FIRST SHIP LEASE
Performance |
| Timeline |
| Orient Overseas |
| FIRST SHIP LEASE |
Orient Overseas and FIRST SHIP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orient Overseas and FIRST SHIP
The main advantage of trading using opposite Orient Overseas and FIRST SHIP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Overseas position performs unexpectedly, FIRST 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 FIRST SHIP will offset losses from the drop in FIRST SHIP's long position.| Orient Overseas vs. VIENNA INSURANCE GR | Orient Overseas vs. Insurance Australia Group | Orient Overseas vs. CHINA SOUTHN AIR H | Orient Overseas vs. LAir Liquide SA |
| FIRST SHIP vs. COSCO SHIPPING Holdings | FIRST SHIP vs. Hapag Lloyd AG | FIRST SHIP vs. Orient Overseas Limited | FIRST SHIP vs. Mitsui OSK Lines |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |