Correlation Between Global Ship and CPLP Old

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

Diversification Opportunities for Global Ship and CPLP Old

0.0

Correlation Coefficient

Global Ship  CPLP Old

Pay attention - limited upside

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

Pair Corralation between Global Ship and CPLP Old

If you would invest  2,093  in Global Ship Lease on December 18, 2024 and sell it today you would earn a total of  225.00  from holding Global Ship Lease or generate 10.75% 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.  CPLP Old

Global Ship Lease

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global Ship Lease are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Global Ship may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CPLP Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days CPLP Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, CPLP Old is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Global Ship and CPLP Old

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

The idea behind Global Ship Lease and CPLP Old 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.