Correlation Between Costamare and Atlas Corp
Can any of the company-specific risk be diversified away by investing in both Costamare and Atlas Corp 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 Atlas Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Costamare and Atlas Corp, you can compare the effects of market volatilities on Costamare and Atlas Corp 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 Atlas Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costamare and Atlas Corp.
Diversification Opportunities for Costamare and Atlas Corp
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Costamare and Atlas is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Costamare and Atlas Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Corp 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 Atlas Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Corp has no effect on the direction of Costamare i.e., Costamare and Atlas Corp go up and down completely randomly.
Pair Corralation between Costamare and Atlas Corp
Assuming the 90 days trading horizon Costamare is expected to generate 1.11 times less return on investment than Atlas Corp. But when comparing it to its historical volatility, Costamare is 1.1 times less risky than Atlas Corp. It trades about 0.07 of its potential returns per unit of risk. Atlas Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,201 in Atlas Corp on August 24, 2024 and sell it today you would earn a total of 306.00 from holding Atlas Corp or generate 13.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costamare vs. Atlas Corp
Performance |
| Timeline |
| Costamare |
| Atlas Corp |
Costamare and Atlas Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costamare and Atlas Corp
The main advantage of trading using opposite Costamare and Atlas Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costamare position performs unexpectedly, Atlas Corp 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 Atlas Corp will offset losses from the drop in Atlas Corp's long position.| Costamare vs. Safe Bulkers | Costamare vs. Safe Bulkers | Costamare vs. Diana Shipping | Costamare vs. Global Ship Lease |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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