Correlation Between Costamare and Golden Ocean
Can any of the company-specific risk be diversified away by investing in both Costamare and Golden Ocean 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 Golden Ocean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Costamare and Golden Ocean Group, you can compare the effects of market volatilities on Costamare and Golden Ocean 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 Golden Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costamare and Golden Ocean.
Diversification Opportunities for Costamare and Golden Ocean
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Costamare and Golden is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Costamare and Golden Ocean Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Ocean Group 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 Golden Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Ocean Group has no effect on the direction of Costamare i.e., Costamare and Golden Ocean go up and down completely randomly.
Pair Corralation between Costamare and Golden Ocean
Given the investment horizon of 90 days Costamare is expected to generate 1.0 times more return on investment than Golden Ocean. However, Costamare is 1.0 times less risky than Golden Ocean. It trades about 0.06 of its potential returns per unit of risk. Golden Ocean Group is currently generating about 0.05 per unit of risk. If you would invest 872.00 in Costamare on August 23, 2024 and sell it today you would earn a total of 572.00 from holding Costamare or generate 65.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costamare vs. Golden Ocean Group
Performance |
| Timeline |
| Costamare |
| Golden Ocean Group |
Costamare and Golden Ocean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costamare and Golden Ocean
The main advantage of trading using opposite Costamare and Golden Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costamare position performs unexpectedly, Golden Ocean 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 Golden Ocean will offset losses from the drop in Golden Ocean's long position.| Costamare vs. Global Ship Lease | Costamare vs. Navios Maritime Partners | Costamare vs. Genco Shipping Trading | Costamare vs. Danaos |
| Golden Ocean vs. Genco Shipping Trading | Golden Ocean vs. Global Ship Lease | Golden Ocean vs. Diana Shipping | Golden Ocean vs. Star Bulk Carriers |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |