Correlation Between Globus Maritime and Nordic American

Can any of the company-specific risk be diversified away by investing in both Globus Maritime and Nordic American 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 Globus Maritime and Nordic American into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Globus Maritime and Nordic American Tankers, you can compare the effects of market volatilities on Globus Maritime and Nordic American 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 Globus Maritime with a short position of Nordic American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globus Maritime and Nordic American.

Diversification Opportunities for Globus Maritime and Nordic American

0.5

Correlation Coefficient

Globus Maritime  Nordic American

Very weak diversification

The 3 months correlation between Globus and Nordic is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Globus Maritime and Nordic American Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic American Tankers and Globus Maritime 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 Globus Maritime are associated (or correlated) with Nordic American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic American Tankers has no effect on the direction of Globus Maritime i.e., Globus Maritime and Nordic American go up and down completely randomly.

Pair Corralation between Globus Maritime and Nordic American

Given the investment horizon of 90 days Globus Maritime is expected to generate 1.45 times more return on investment than Nordic American. However, Globus Maritime is 1.45 times more volatile than Nordic American Tankers. It trades about 0.04 of its potential returns per unit of risk. Nordic American Tankers is currently generating about 0.05 per unit of risk. If you would invest  116.00  in Globus Maritime on December 28, 2024 and sell it today you would earn a total of  5.00  from holding Globus Maritime or generate 4.31% return on investment over 90 days.

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

Globus Maritime  vs.  Nordic American Tankers

Globus Maritime

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Globus Maritime are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, Globus Maritime may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Nordic American Tankers

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nordic American Tankers are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Nordic American may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Globus Maritime and Nordic American

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

The idea behind Globus Maritime and Nordic American Tankers 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.