Correlation Between Global Ship and Matson

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

Diversification Opportunities for Global Ship and Matson

-0.45

Correlation Coefficient

Global Ship  Matson

Very good diversification

The 3 months correlation between Global and Matson is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Matson Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matson Inc 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 Matson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matson Inc has no effect on the direction of Global Ship i.e., Global Ship and Matson go up and down completely randomly.

Pair Corralation between Global Ship and Matson

Considering the 90-day investment horizon Global Ship Lease is expected to generate 1.07 times more return on investment than Matson. However, Global Ship is 1.07 times more volatile than Matson Inc. It trades about 0.08 of its potential returns per unit of risk. Matson Inc is currently generating about -0.03 per unit of risk. If you would invest  2,127  in Global Ship Lease on December 28, 2024 and sell it today you would earn a total of  162.00  from holding Global Ship Lease or generate 7.62% return on investment over 90 days.

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

Global Ship Lease  vs.  Matson Inc

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 6 (%) 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.

Matson Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Matson Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Matson is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Global Ship and Matson

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

The idea behind Global Ship Lease and Matson Inc 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.