Correlation Between Ardmore Shpng and Eagle Bulk
Can any of the company-specific risk be diversified away by investing in both Ardmore Shpng and Eagle Bulk 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 Eagle Bulk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ardmore Shpng and Eagle Bulk Shipping, you can compare the effects of market volatilities on Ardmore Shpng and Eagle Bulk 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 Eagle Bulk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ardmore Shpng and Eagle Bulk.
Diversification Opportunities for Ardmore Shpng and Eagle Bulk
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ardmore and Eagle is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ardmore Shpng and Eagle Bulk Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Bulk Shipping 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 Eagle Bulk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Bulk Shipping has no effect on the direction of Ardmore Shpng i.e., Ardmore Shpng and Eagle Bulk go up and down completely randomly.
Pair Corralation between Ardmore Shpng and Eagle Bulk
Considering the 90-day investment horizon Ardmore Shpng is expected to generate 2.26 times less return on investment than Eagle Bulk. In addition to that, Ardmore Shpng is 1.09 times more volatile than Eagle Bulk Shipping. It trades about 0.02 of its total potential returns per unit of risk. Eagle Bulk Shipping is currently generating about 0.05 per unit of volatility. If you would invest 4,243 in Eagle Bulk Shipping on August 27, 2024 and sell it today you would earn a total of 107.00 from holding Eagle Bulk Shipping or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 9.38% |
| Values | Daily Returns |
Ardmore Shpng vs. Eagle Bulk Shipping
Performance |
| Timeline |
| Ardmore Shpng |
| Eagle Bulk Shipping |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ardmore Shpng and Eagle Bulk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ardmore Shpng and Eagle Bulk
The main advantage of trading using opposite Ardmore Shpng and Eagle Bulk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ardmore Shpng position performs unexpectedly, Eagle Bulk 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 Eagle Bulk will offset losses from the drop in Eagle Bulk's long position.| Ardmore Shpng vs. Danaos | Ardmore Shpng vs. Global Ship Lease | Ardmore Shpng vs. Euroseas | Ardmore Shpng vs. Navios Maritime Partners |
| Eagle Bulk vs. Star Bulk Carriers | Eagle Bulk vs. Golden Ocean Group | Eagle Bulk vs. Global Ship Lease | Eagle Bulk vs. Diana Shipping |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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