Correlation Between Costamare and Global Ship
Can any of the company-specific risk be diversified away by investing in both Costamare and Global Ship 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 Global Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Costamare and Global Ship Lease, you can compare the effects of market volatilities on Costamare and Global Ship 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 Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costamare and Global Ship.
Diversification Opportunities for Costamare and Global Ship
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Costamare and Global is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Costamare and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease 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 Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of Costamare i.e., Costamare and Global Ship go up and down completely randomly.
Pair Corralation between Costamare and Global Ship
Given the investment horizon of 90 days Costamare is expected to generate 0.91 times more return on investment than Global Ship. However, Costamare is 1.1 times less risky than Global Ship. It trades about 0.01 of its potential returns per unit of risk. Global Ship Lease is currently generating about -0.17 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. Global Ship Lease
Performance |
| Timeline |
| Costamare |
| Global Ship Lease |
Costamare and Global Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costamare and Global Ship
The main advantage of trading using opposite Costamare and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costamare position performs unexpectedly, Global Ship 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 Global Ship will offset losses from the drop in Global Ship's long position.| Costamare vs. Global Ship Lease | Costamare vs. Navios Maritime Partners | Costamare vs. Genco Shipping Trading | Costamare vs. Danaos |
| Global Ship vs. Costamare | Global Ship vs. Navios Maritime Partners | Global Ship vs. Genco Shipping Trading | Global Ship 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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