Correlation Between Stolt Nielsen and American Shipping
Can any of the company-specific risk be diversified away by investing in both Stolt Nielsen and American Shipping 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 Stolt Nielsen and American Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stolt Nielsen Limited and American Shipping, you can compare the effects of market volatilities on Stolt Nielsen and American Shipping 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 Stolt Nielsen with a short position of American Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stolt Nielsen and American Shipping.
Diversification Opportunities for Stolt Nielsen and American Shipping
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stolt and American is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Stolt Nielsen Limited and American Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shipping and Stolt Nielsen 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 Stolt Nielsen Limited are associated (or correlated) with American Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Shipping has no effect on the direction of Stolt Nielsen i.e., Stolt Nielsen and American Shipping go up and down completely randomly.
Pair Corralation between Stolt Nielsen and American Shipping
Assuming the 90 days trading horizon Stolt Nielsen Limited is expected to generate 0.19 times more return on investment than American Shipping. However, Stolt Nielsen Limited is 5.34 times less risky than American Shipping. It trades about 0.21 of its potential returns per unit of risk. American Shipping is currently generating about -0.12 per unit of risk. If you would invest 23,100 in Stolt Nielsen Limited on April 25, 2025 and sell it today you would earn a total of 7,400 from holding Stolt Nielsen Limited or generate 32.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Stolt Nielsen Limited vs. American Shipping
Performance |
Timeline |
Stolt Nielsen Limited |
American Shipping |
Stolt Nielsen and American Shipping Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Stolt Nielsen and American Shipping
The main advantage of trading using opposite Stolt Nielsen and American Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stolt Nielsen position performs unexpectedly, American Shipping 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 American Shipping will offset losses from the drop in American Shipping's long position.Stolt Nielsen vs. Bien Sparebank ASA | Stolt Nielsen vs. SoftwareOne Holding | Stolt Nielsen vs. Sogn Sparebank | Stolt Nielsen vs. Tysnes Sparebank |
American Shipping vs. Stolt Nielsen Limited | American Shipping vs. BW LPG | American Shipping vs. Aker ASA | American Shipping vs. BW Offshore |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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