Correlation Between Global Ship and 8426EPAD0

Can any of the company-specific risk be diversified away by investing in both Global Ship and 8426EPAD0 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 8426EPAD0 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 US8426EPAD09, you can compare the effects of market volatilities on Global Ship and 8426EPAD0 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 8426EPAD0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and 8426EPAD0.

Diversification Opportunities for Global Ship and 8426EPAD0

0.0

Correlation Coefficient

Global Ship  8426EPAD0

Pay attention - limited upside

The 3 months correlation between Global and 8426EPAD0 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and US8426EPAD09 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US8426EPAD09 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 8426EPAD0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US8426EPAD09 has no effect on the direction of Global Ship i.e., Global Ship and 8426EPAD0 go up and down completely randomly.

Pair Corralation between Global Ship and 8426EPAD0

If you would invest (100.00) in US8426EPAD09 on October 13, 2024 and sell it today you would earn a total of  100.00  from holding US8426EPAD09 or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Global Ship Lease  vs.  US8426EPAD09

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 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.

US8426EPAD09

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US8426EPAD09 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, 8426EPAD0 is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Global Ship and 8426EPAD0

The main advantage of trading using opposite Global Ship and 8426EPAD0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship position performs unexpectedly, 8426EPAD0 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 8426EPAD0 will offset losses from the drop in 8426EPAD0's long position.

The idea behind Global Ship Lease and US8426EPAD09 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..