Correlation Between TRAVEL + and Global Ship

Can any of the company-specific risk be diversified away by investing in both TRAVEL + and Global Ship 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 TRAVEL + and Global Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TRAVEL LEISURE DL 01 and Global Ship Lease, you can compare the effects of market volatilities on TRAVEL + and Global Ship 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 TRAVEL + with a short position of Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAVEL + and Global Ship.

Diversification Opportunities for TRAVEL + and Global Ship

0.83

Correlation Coefficient

TRAVEL +  Global Ship

Very poor diversification

The 3 months correlation between TRAVEL and Global is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding TRAVEL LEISURE DL 01 and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease and TRAVEL + 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 TRAVEL LEISURE DL 01 are associated (or correlated) with Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of TRAVEL + i.e., TRAVEL + and Global Ship go up and down completely randomly.

Pair Corralation between TRAVEL + and Global Ship

Assuming the 90 days trading horizon TRAVEL + is expected to generate 1.09 times less return on investment than Global Ship. But when comparing it to its historical volatility, TRAVEL LEISURE DL 01 is 1.08 times less risky than Global Ship. It trades about 0.26 of its potential returns per unit of risk. Global Ship Lease is currently generating about 0.26 of returns per unit of risk over similar time horizon. 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 Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

TRAVEL LEISURE DL 01  vs.  Global Ship Lease

TRAVEL LEISURE DL

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TRAVEL LEISURE DL 01 are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRAVEL + reported solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with TRAVEL + and Global Ship

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

The idea behind TRAVEL LEISURE DL 01 and Global Ship Lease 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.