Correlation Between Global Ship and ACANTHE DEVELOPPEM

Can any of the company-specific risk be diversified away by investing in both Global Ship and ACANTHE DEVELOPPEM 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 ACANTHE DEVELOPPEM 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 ACANTHE DEVELOPPEM ON, you can compare the effects of market volatilities on Global Ship and ACANTHE DEVELOPPEM 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 ACANTHE DEVELOPPEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and ACANTHE DEVELOPPEM.

Diversification Opportunities for Global Ship and ACANTHE DEVELOPPEM

0.42

Correlation Coefficient

Global Ship  ACANTHE DEVELOPPEM

Very weak diversification

The 3 months correlation between Global and ACANTHE is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and ACANTHE DEVELOPPEM ON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACANTHE DEVELOPPEM 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 ACANTHE DEVELOPPEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACANTHE DEVELOPPEM has no effect on the direction of Global Ship i.e., Global Ship and ACANTHE DEVELOPPEM go up and down completely randomly.

Pair Corralation between Global Ship and ACANTHE DEVELOPPEM

Assuming the 90 days horizon Global Ship Lease is expected to generate 0.32 times more return on investment than ACANTHE DEVELOPPEM. However, Global Ship Lease is 3.11 times less risky than ACANTHE DEVELOPPEM. It trades about 0.18 of its potential returns per unit of risk. ACANTHE DEVELOPPEM ON is currently generating about -0.07 per unit of risk. If you would invest  2,076  in Global Ship Lease on October 10, 2024 and sell it today you would earn a total of  126.00  from holding Global Ship Lease or generate 6.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Global Ship Lease  vs.  ACANTHE DEVELOPPEM ON

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.

ACANTHE DEVELOPPEM

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Global Ship and ACANTHE DEVELOPPEM

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

The idea behind Global Ship Lease and ACANTHE DEVELOPPEM ON 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.