Correlation Between FIRST SHIP and VIRGIN WINES

Can any of the company-specific risk be diversified away by investing in both FIRST SHIP and VIRGIN WINES 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 FIRST SHIP and VIRGIN WINES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FIRST SHIP LEASE and VIRGIN WINES UK, you can compare the effects of market volatilities on FIRST SHIP and VIRGIN WINES 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 FIRST SHIP with a short position of VIRGIN WINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SHIP and VIRGIN WINES.

Diversification Opportunities for FIRST SHIP and VIRGIN WINES

-0.37

Correlation Coefficient

FIRST SHIP  VIRGIN WINES

Very good diversification

The 3 months correlation between FIRST and VIRGIN is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SHIP LEASE and VIRGIN WINES UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIRGIN WINES UK and FIRST 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 FIRST SHIP LEASE are associated (or correlated) with VIRGIN WINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIRGIN WINES UK has no effect on the direction of FIRST SHIP i.e., FIRST SHIP and VIRGIN WINES go up and down completely randomly.

Pair Corralation between FIRST SHIP and VIRGIN WINES

Assuming the 90 days horizon FIRST SHIP is expected to generate 4.48 times less return on investment than VIRGIN WINES. But when comparing it to its historical volatility, FIRST SHIP LEASE is 1.09 times less risky than VIRGIN WINES. It trades about 0.03 of its potential returns per unit of risk. VIRGIN WINES UK is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  37.00  in VIRGIN WINES UK on April 24, 2025 and sell it today you would earn a total of  11.00  from holding VIRGIN WINES UK or generate 29.73% return on investment over 90 days.

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

FIRST SHIP LEASE  vs.  VIRGIN WINES UK

FIRST SHIP LEASE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FIRST SHIP LEASE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FIRST SHIP may actually be approaching a critical reversion point that can send shares even higher in August 2025.

VIRGIN WINES UK

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VIRGIN WINES UK are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, VIRGIN WINES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FIRST SHIP and VIRGIN WINES

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

The idea behind FIRST SHIP LEASE and VIRGIN WINES UK 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 Transaction History module to view history of all your transactions and understand their impact on performance.