Correlation Between Global Ship and CREDIT AGRICOLE

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

Diversification Opportunities for Global Ship and CREDIT AGRICOLE

0.59

Correlation Coefficient

Global Ship  CREDIT AGRICOLE

Very weak diversification

The 3 months correlation between Global and CREDIT is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and CREDIT AGRICOLE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CREDIT AGRICOLE 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 CREDIT AGRICOLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CREDIT AGRICOLE has no effect on the direction of Global Ship i.e., Global Ship and CREDIT AGRICOLE go up and down completely randomly.

Pair Corralation between Global Ship and CREDIT AGRICOLE

Assuming the 90 days horizon Global Ship Lease is expected to under-perform the CREDIT AGRICOLE. In addition to that, Global Ship is 1.52 times more volatile than CREDIT AGRICOLE. It trades about -0.07 of its total potential returns per unit of risk. CREDIT AGRICOLE is currently generating about -0.01 per unit of volatility. If you would invest  1,368  in CREDIT AGRICOLE on October 4, 2024 and sell it today you would lose (35.00) from holding CREDIT AGRICOLE or give up 2.56% of portfolio value over 90 days.

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

Global Ship Lease  vs.  CREDIT AGRICOLE

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

CREDIT AGRICOLE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CREDIT AGRICOLE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CREDIT AGRICOLE is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Global Ship and CREDIT AGRICOLE

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

The idea behind Global Ship Lease and CREDIT AGRICOLE 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.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.