Correlation Between Ardmore Shpng and Costamare
Can any of the company-specific risk be diversified away by investing in both Ardmore Shpng and Costamare 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 Ardmore Shpng and Costamare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ardmore Shpng and Costamare, you can compare the effects of market volatilities on Ardmore Shpng and Costamare 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 Ardmore Shpng with a short position of Costamare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ardmore Shpng and Costamare.
Diversification Opportunities for Ardmore Shpng and Costamare
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ardmore and Costamare is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ardmore Shpng and Costamare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costamare and Ardmore Shpng 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 Ardmore Shpng are associated (or correlated) with Costamare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costamare has no effect on the direction of Ardmore Shpng i.e., Ardmore Shpng and Costamare go up and down completely randomly.
Pair Corralation between Ardmore Shpng and Costamare
Considering the 90-day investment horizon Ardmore Shpng is expected to generate 1.31 times more return on investment than Costamare. However, Ardmore Shpng is 1.31 times more volatile than Costamare. It trades about 0.15 of its potential returns per unit of risk. Costamare is currently generating about -0.01 per unit of risk. If you would invest 1,129 in Ardmore Shpng on October 20, 2024 and sell it today you would earn a total of 95.00 from holding Ardmore Shpng or generate 8.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ardmore Shpng vs. Costamare
Performance |
| Timeline |
| Ardmore Shpng |
| Costamare |
Ardmore Shpng and Costamare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ardmore Shpng and Costamare
The main advantage of trading using opposite Ardmore Shpng and Costamare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ardmore Shpng position performs unexpectedly, Costamare 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 Costamare will offset losses from the drop in Costamare's long position.| Ardmore Shpng vs. International Seaways | Ardmore Shpng vs. Scorpio Tankers | Ardmore Shpng vs. Dorian LPG | Ardmore Shpng vs. Teekay Tankers |
| Costamare vs. Global Ship Lease | Costamare vs. Navios Maritime Partners | Costamare vs. Genco Shipping Trading | Costamare vs. Danaos |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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