Correlation Between Global Ship and BOS Better

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

Diversification Opportunities for Global Ship and BOS Better

0.15

Correlation Coefficient

Global Ship  BOS Better

Average diversification

The 3 months correlation between Global and BOS is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and BOS Better Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOS Better Online 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 BOS Better. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOS Better Online has no effect on the direction of Global Ship i.e., Global Ship and BOS Better go up and down completely randomly.

Pair Corralation between Global Ship and BOS Better

Assuming the 90 days trading horizon Global Ship is expected to generate 2.31 times less return on investment than BOS Better. But when comparing it to its historical volatility, Global Ship Lease is 2.35 times less risky than BOS Better. It trades about 0.05 of its potential returns per unit of risk. BOS Better Online is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  275.00  in BOS Better Online on December 3, 2024 and sell it today you would earn a total of  96.00  from holding BOS Better Online or generate 34.91% return on investment over 90 days.

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

Global Ship Lease  vs.  BOS Better Online

Global Ship Lease

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global Ship Lease are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Global Ship is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

BOS Better Online

Risk-Adjusted Performance

Modest

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

Pair Trading with Global Ship and BOS Better

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

The idea behind Global Ship Lease and BOS Better Online 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.