Correlation Between Global Ship and TELES Informationstech

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

Diversification Opportunities for Global Ship and TELES Informationstech

0.05

Correlation Coefficient

Global Ship  TELES Informationstech

Significant diversification

The 3 months correlation between Global and TELES is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and TELES Informationstechnologien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELES Informationstech 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 TELES Informationstech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELES Informationstech has no effect on the direction of Global Ship i.e., Global Ship and TELES Informationstech go up and down completely randomly.

Pair Corralation between Global Ship and TELES Informationstech

Assuming the 90 days horizon Global Ship is expected to generate 4.5 times less return on investment than TELES Informationstech. But when comparing it to its historical volatility, Global Ship Lease is 5.14 times less risky than TELES Informationstech. It trades about 0.16 of its potential returns per unit of risk. TELES Informationstechnologien AG is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  44.00  in TELES Informationstechnologien AG on December 4, 2024 and sell it today you would earn a total of  6.00  from holding TELES Informationstechnologien AG or generate 13.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Global Ship Lease  vs.  TELES Informationstechnologien

Global Ship Lease

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global Ship Lease are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Global Ship is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

TELES Informationstech

Risk-Adjusted Performance

Very Weak

Over the last 90 days TELES Informationstechnologien AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's forward-looking signals remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Global Ship and TELES Informationstech

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

The idea behind Global Ship Lease and TELES Informationstechnologien AG 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.