Correlation Between Costamare and Ardmore Shpng
Can any of the company-specific risk be diversified away by investing in both Costamare and Ardmore Shpng 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 Ardmore Shpng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Costamare and Ardmore Shpng, you can compare the effects of market volatilities on Costamare and Ardmore Shpng 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 Ardmore Shpng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costamare and Ardmore Shpng.
Diversification Opportunities for Costamare and Ardmore Shpng
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Costamare and Ardmore is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Costamare and Ardmore Shpng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardmore Shpng 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 Ardmore Shpng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardmore Shpng has no effect on the direction of Costamare i.e., Costamare and Ardmore Shpng go up and down completely randomly.
Pair Corralation between Costamare and Ardmore Shpng
Given the investment horizon of 90 days Costamare is expected to generate 0.89 times more return on investment than Ardmore Shpng. However, Costamare is 1.13 times less risky than Ardmore Shpng. It trades about 0.06 of its potential returns per unit of risk. Ardmore Shpng is currently generating about 0.01 per unit of risk. If you would invest 832.00 in Costamare on August 27, 2024 and sell it today you would earn a total of 597.00 from holding Costamare or generate 71.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costamare vs. Ardmore Shpng
Performance |
| Timeline |
| Costamare |
| Ardmore Shpng |
Costamare and Ardmore Shpng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costamare and Ardmore Shpng
The main advantage of trading using opposite Costamare and Ardmore Shpng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costamare position performs unexpectedly, Ardmore Shpng 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 Ardmore Shpng will offset losses from the drop in Ardmore Shpng's long position.| Costamare vs. Global Ship Lease | Costamare vs. Navios Maritime Partners | Costamare vs. Genco Shipping Trading | Costamare vs. Danaos |
| Ardmore Shpng vs. Danaos | Ardmore Shpng vs. Global Ship Lease | Ardmore Shpng vs. Euroseas | Ardmore Shpng vs. Navios Maritime Partners |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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