Correlation Between Costamare and Himalaya Shipping
Can any of the company-specific risk be diversified away by investing in both Costamare and Himalaya Shipping 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 Himalaya Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Costamare and Himalaya Shipping, you can compare the effects of market volatilities on Costamare and Himalaya Shipping 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 Himalaya Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costamare and Himalaya Shipping.
Diversification Opportunities for Costamare and Himalaya Shipping
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Costamare and Himalaya is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Costamare and Himalaya Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Himalaya Shipping 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 Himalaya Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Himalaya Shipping has no effect on the direction of Costamare i.e., Costamare and Himalaya Shipping go up and down completely randomly.
Pair Corralation between Costamare and Himalaya Shipping
Given the investment horizon of 90 days Costamare is expected to generate 1.08 times less return on investment than Himalaya Shipping. But when comparing it to its historical volatility, Costamare is 1.3 times less risky than Himalaya Shipping. It trades about 0.06 of its potential returns per unit of risk. Himalaya Shipping is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 466.00 in Himalaya Shipping on August 24, 2024 and sell it today you would earn a total of 225.00 from holding Himalaya Shipping or generate 48.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 84.07% |
| Values | Daily Returns |
Costamare vs. Himalaya Shipping
Performance |
| Timeline |
| Costamare |
| Himalaya Shipping |
Costamare and Himalaya Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costamare and Himalaya Shipping
The main advantage of trading using opposite Costamare and Himalaya Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costamare position performs unexpectedly, Himalaya Shipping 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 Himalaya Shipping will offset losses from the drop in Himalaya Shipping's long position.| Costamare vs. Global Ship Lease | Costamare vs. Navios Maritime Partners | Costamare vs. Genco Shipping Trading | Costamare vs. Danaos |
| Himalaya Shipping vs. Global Ship Lease | Himalaya Shipping vs. Costamare | Himalaya Shipping vs. Navios Maritime Partners | Himalaya Shipping vs. Genco Shipping Trading |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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