Correlation Between Global Ship and Davide Campari

Can any of the company-specific risk be diversified away by investing in both Global Ship and Davide Campari 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 Global Ship and Davide Campari into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Ship Lease and Davide Campari Milano, you can compare the effects of market volatilities on Global Ship and Davide Campari 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 Global Ship with a short position of Davide Campari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Davide Campari.

Diversification Opportunities for Global Ship and Davide Campari

0.62

Correlation Coefficient

Global Ship  Davide Campari

Poor diversification

The 3 months correlation between Global and Davide is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Davide Campari Milano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Davide Campari Milano and Global 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 Global Ship Lease are associated (or correlated) with Davide Campari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Davide Campari Milano has no effect on the direction of Global Ship i.e., Global Ship and Davide Campari go up and down completely randomly.

Pair Corralation between Global Ship and Davide Campari

Assuming the 90 days horizon Global Ship Lease is expected to generate 0.69 times more return on investment than Davide Campari. However, Global Ship Lease is 1.46 times less risky than Davide Campari. It trades about -0.09 of its potential returns per unit of risk. Davide Campari Milano is currently generating about -0.11 per unit of risk. If you would invest  2,620  in Global Ship Lease on September 22, 2024 and sell it today you would lose (572.00) from holding Global Ship Lease or give up 21.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.24%
Values	Daily Returns

Global Ship Lease  vs.  Davide Campari Milano

Global Ship Lease

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Ship Lease has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Global Ship is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Davide Campari Milano

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Davide Campari Milano has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Global Ship and Davide Campari

The main advantage of trading using opposite Global Ship and Davide Campari positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, Davide Campari 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 Davide Campari will offset losses from the drop in Davide Campari's long position.

The idea behind Global Ship Lease and Davide Campari Milano pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.