Correlation Between Costamare and Safe Bulkers
Can any of the company-specific risk be diversified away by investing in both Costamare and Safe Bulkers 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 Costamare and Safe Bulkers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Costamare and Safe Bulkers, you can compare the effects of market volatilities on Costamare and Safe Bulkers 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 Costamare with a short position of Safe Bulkers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costamare and Safe Bulkers.
Diversification Opportunities for Costamare and Safe Bulkers
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Costamare and Safe is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Costamare and Safe Bulkers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe Bulkers and Costamare 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 Costamare are associated (or correlated) with Safe Bulkers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe Bulkers has no effect on the direction of Costamare i.e., Costamare and Safe Bulkers go up and down completely randomly.
Pair Corralation between Costamare and Safe Bulkers
Assuming the 90 days trading horizon Costamare is expected to generate 1.52 times more return on investment than Safe Bulkers. However, Costamare is 1.52 times more volatile than Safe Bulkers. It trades about 0.07 of its potential returns per unit of risk. Safe Bulkers is currently generating about 0.09 per unit of risk. If you would invest 2,134 in Costamare on August 31, 2024 and sell it today you would earn a total of 446.00 from holding Costamare or generate 20.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.98% |
| Values | Daily Returns |
Costamare vs. Safe Bulkers
Performance |
| Timeline |
| Costamare |
| Safe Bulkers |
Costamare and Safe Bulkers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costamare and Safe Bulkers
The main advantage of trading using opposite Costamare and Safe Bulkers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costamare position performs unexpectedly, Safe Bulkers 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 Safe Bulkers will offset losses from the drop in Safe Bulkers' long position.| Costamare vs. Costamare | Costamare vs. Global Ship Lease | Costamare vs. Diana Shipping | Costamare vs. Safe Bulkers |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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