Correlation Between Costamare and Euroseas
Can any of the company-specific risk be diversified away by investing in both Costamare and Euroseas 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 Euroseas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Costamare and Euroseas, you can compare the effects of market volatilities on Costamare and Euroseas 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 Euroseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costamare and Euroseas.
Diversification Opportunities for Costamare and Euroseas
Poor diversification
The 3 months correlation between Costamare and Euroseas is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Costamare and Euroseas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euroseas 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 Euroseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euroseas has no effect on the direction of Costamare i.e., Costamare and Euroseas go up and down completely randomly.
Pair Corralation between Costamare and Euroseas
Given the investment horizon of 90 days Costamare is expected to generate 0.77 times more return on investment than Euroseas. However, Costamare is 1.29 times less risky than Euroseas. It trades about 0.01 of its potential returns per unit of risk. Euroseas is currently generating about -0.18 per unit of risk. If you would invest 1,405 in Costamare on August 23, 2024 and sell it today you would earn a total of 1.00 from holding Costamare or generate 0.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costamare vs. Euroseas
Performance |
| Timeline |
| Costamare |
| Euroseas |
Costamare and Euroseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costamare and Euroseas
The main advantage of trading using opposite Costamare and Euroseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costamare position performs unexpectedly, Euroseas 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 Euroseas will offset losses from the drop in Euroseas' long position.| Costamare vs. Global Ship Lease | Costamare vs. Navios Maritime Partners | Costamare vs. Genco Shipping Trading | Costamare vs. Danaos |
| Euroseas vs. Pyxis Tankers | Euroseas vs. Pacific Basin Shipping | Euroseas vs. dAmico International Shipping | Euroseas vs. Danaos |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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