Correlation Between Global Ship and SEKISUI CHEMICAL

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

Diversification Opportunities for Global Ship and SEKISUI CHEMICAL

-0.35

Correlation Coefficient

Global Ship  SEKISUI CHEMICAL

Very good diversification

The 3 months correlation between Global and SEKISUI is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and SEKISUI CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEKISUI CHEMICAL 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 SEKISUI CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEKISUI CHEMICAL has no effect on the direction of Global Ship i.e., Global Ship and SEKISUI CHEMICAL go up and down completely randomly.

Pair Corralation between Global Ship and SEKISUI CHEMICAL

Assuming the 90 days horizon Global Ship Lease is expected to generate 1.58 times more return on investment than SEKISUI CHEMICAL. However, Global Ship is 1.58 times more volatile than SEKISUI CHEMICAL. It trades about 0.26 of its potential returns per unit of risk. SEKISUI CHEMICAL is currently generating about -0.06 per unit of risk. If you would invest  1,776  in Global Ship Lease on April 24, 2025 and sell it today you would earn a total of  610.00  from holding Global Ship Lease or generate 34.35% return on investment over 90 days.

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

Global Ship Lease  vs.  SEKISUI CHEMICAL

Global Ship Lease

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global Ship Lease are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Global Ship reported solid returns over the last few months and may actually be approaching a breakup point.

SEKISUI CHEMICAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days SEKISUI CHEMICAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, SEKISUI CHEMICAL 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 SEKISUI CHEMICAL

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

The idea behind Global Ship Lease and SEKISUI CHEMICAL 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.