Correlation Between Costamare and SEACOR Marine
Can any of the company-specific risk be diversified away by investing in both Costamare and SEACOR Marine 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 SEACOR Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Costamare and SEACOR Marine Holdings, you can compare the effects of market volatilities on Costamare and SEACOR Marine 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 SEACOR Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costamare and SEACOR Marine.
Diversification Opportunities for Costamare and SEACOR Marine
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Costamare and SEACOR is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Costamare and SEACOR Marine Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEACOR Marine Holdings 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 SEACOR Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEACOR Marine Holdings has no effect on the direction of Costamare i.e., Costamare and SEACOR Marine go up and down completely randomly.
Pair Corralation between Costamare and SEACOR Marine
Assuming the 90 days trading horizon Costamare is expected to generate 0.1 times more return on investment than SEACOR Marine. However, Costamare is 10.32 times less risky than SEACOR Marine. It trades about -0.07 of its potential returns per unit of risk. SEACOR Marine Holdings is currently generating about -0.14 per unit of risk. If you would invest 2,653 in Costamare on August 28, 2024 and sell it today you would lose (22.00) from holding Costamare or give up 0.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costamare vs. SEACOR Marine Holdings
Performance |
| Timeline |
| Costamare |
| SEACOR Marine Holdings |
Costamare and SEACOR Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costamare and SEACOR Marine
The main advantage of trading using opposite Costamare and SEACOR Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costamare position performs unexpectedly, SEACOR Marine 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 SEACOR Marine will offset losses from the drop in SEACOR Marine's long position.| Costamare vs. Safe Bulkers | Costamare vs. Safe Bulkers | Costamare vs. Diana Shipping | Costamare vs. Global Ship Lease |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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