Correlation Between First Ship and 38869AAD9

Can any of the company-specific risk be diversified away by investing in both First Ship and 38869AAD9 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 First Ship and 38869AAD9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Ship Lease and US38869AAD90, you can compare the effects of market volatilities on First Ship and 38869AAD9 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 First Ship with a short position of 38869AAD9. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Ship and 38869AAD9.

Diversification Opportunities for First Ship and 38869AAD9

0.0

Correlation Coefficient

First Ship  38869AAD9

Pay attention - limited upside

The 3 months correlation between First and 38869AAD9 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Ship Lease and US38869AAD90 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US38869AAD90 and First 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 First Ship Lease are associated (or correlated) with 38869AAD9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US38869AAD90 has no effect on the direction of First Ship i.e., First Ship and 38869AAD9 go up and down completely randomly.

Pair Corralation between First Ship and 38869AAD9

Assuming the 90 days horizon First Ship is expected to generate 37.39 times less return on investment than 38869AAD9. But when comparing it to its historical volatility, First Ship Lease is 26.42 times less risky than 38869AAD9. It trades about 0.04 of its potential returns per unit of risk. US38869AAD90 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  8,707  in US38869AAD90 on October 26, 2024 and sell it today you would lose (161.00) from holding US38869AAD90 or give up 1.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	80.24%
Values	Daily Returns

First Ship Lease  vs.  US38869AAD90

First Ship Lease

Risk-Adjusted Performance

0 of 100

Very Weak

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

US38869AAD90

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US38869AAD90 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for US38869AAD90 investors.

Pair Trading with First Ship and 38869AAD9

The main advantage of trading using opposite First Ship and 38869AAD9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Ship position performs unexpectedly, 38869AAD9 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 38869AAD9 will offset losses from the drop in 38869AAD9's long position.

The idea behind First Ship Lease and US38869AAD90 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.