Correlation Between Global Ship and MUTUIONLINE

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

Diversification Opportunities for Global Ship and MUTUIONLINE

-0.48

Correlation Coefficient

Global Ship  MUTUIONLINE

Very good diversification

The 3 months correlation between Global and MUTUIONLINE is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and MUTUIONLINE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MUTUIONLINE 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 MUTUIONLINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MUTUIONLINE has no effect on the direction of Global Ship i.e., Global Ship and MUTUIONLINE go up and down completely randomly.

Pair Corralation between Global Ship and MUTUIONLINE

Assuming the 90 days horizon Global Ship is expected to generate 35.93 times less return on investment than MUTUIONLINE. But when comparing it to its historical volatility, Global Ship Lease is 1.16 times less risky than MUTUIONLINE. It trades about 0.01 of its potential returns per unit of risk. MUTUIONLINE is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  3,235  in MUTUIONLINE on September 14, 2024 and sell it today you would earn a total of  645.00  from holding MUTUIONLINE or generate 19.94% return on investment over 90 days.

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

Global Ship Lease  vs.  MUTUIONLINE

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.

MUTUIONLINE

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MUTUIONLINE are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain essential indicators, MUTUIONLINE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Ship and MUTUIONLINE

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

The idea behind Global Ship Lease and MUTUIONLINE 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.