Correlation Between Global Ship and First Citizens

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

Diversification Opportunities for Global Ship and First Citizens

0.0

Correlation Coefficient

Global Ship  First Citizens

Pay attention - limited upside

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

Pair Corralation between Global Ship and First Citizens

Assuming the 90 days trading horizon Global Ship Lease is expected to generate 0.49 times more return on investment than First Citizens. However, Global Ship Lease is 2.04 times less risky than First Citizens. It trades about 0.05 of its potential returns per unit of risk. The First Citizens is currently generating about -0.03 per unit of risk. If you would invest  2,244  in Global Ship Lease on September 30, 2024 and sell it today you would earn a total of  358.00  from holding Global Ship Lease or generate 15.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	22.25%
Values	Daily Returns

Global Ship Lease  vs.  The First Citizens

Global Ship Lease

Risk-Adjusted Performance

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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 latest stock price disturbance, may contribute to short-term losses for the investors.

First Citizens

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The First Citizens has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, First Citizens is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Global Ship and First Citizens

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

The idea behind Global Ship Lease and The First Citizens 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.