Correlation Between Retail Estates and Global Ship
Can any of the company-specific risk be diversified away by investing in both Retail Estates 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 Retail Estates and Global Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates NV and Global Ship Lease, you can compare the effects of market volatilities on Retail Estates 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 Retail Estates with a short position of Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and Global Ship.
Diversification Opportunities for Retail Estates and Global Ship
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Retail and Global is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV 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 Retail Estates 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 Retail Estates NV 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 Retail Estates i.e., Retail Estates and Global Ship go up and down completely randomly.
Pair Corralation between Retail Estates and Global Ship
Assuming the 90 days horizon Retail Estates NV is expected to under-perform the Global Ship. But the stock apears to be less risky and, when comparing its historical volatility, Retail Estates NV is 1.71 times less risky than Global Ship. The stock trades about -0.32 of its potential returns per unit of risk. The Global Ship Lease is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 2,175 in Global Ship Lease on August 27, 2024 and sell it today you would lose (43.00) from holding Global Ship Lease or give up 1.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Estates NV vs. Global Ship Lease
Performance |
| Timeline |
| Retail Estates NV |
| Global Ship Lease |
Retail Estates and Global Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and Global Ship
The main advantage of trading using opposite Retail Estates and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates 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.| Retail Estates vs. TRADEGATE | Retail Estates vs. UNITED UTILITIES GR | Retail Estates vs. United Utilities Group | Retail Estates vs. SIDETRADE EO 1 |
| Global Ship vs. COSTCO WHOLESALE CDR | Global Ship vs. WisdomTree Investments | Global Ship vs. Apollo Investment Corp | Global Ship vs. Retail Estates NV |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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