Correlation Between Costamare and Safe Bulkers
Can any of the company-specific risk be diversified away by investing in both Costamare and Safe Bulkers 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 Safe Bulkers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Costamare and Safe Bulkers, you can compare the effects of market volatilities on Costamare and Safe Bulkers 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 Safe Bulkers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costamare and Safe Bulkers.
Diversification Opportunities for Costamare and Safe Bulkers
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Costamare and Safe is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Costamare and Safe Bulkers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe Bulkers 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 Safe Bulkers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe Bulkers has no effect on the direction of Costamare i.e., Costamare and Safe Bulkers go up and down completely randomly.
Pair Corralation between Costamare and Safe Bulkers
Given the investment horizon of 90 days Costamare is expected to under-perform the Safe Bulkers. But the stock apears to be less risky and, when comparing its historical volatility, Costamare is 1.12 times less risky than Safe Bulkers. The stock trades about -0.35 of its potential returns per unit of risk. The Safe Bulkers is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 342.00 in Safe Bulkers on November 18, 2024 and sell it today you would earn a total of 17.00 from holding Safe Bulkers or generate 4.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costamare vs. Safe Bulkers
Performance |
| Timeline |
| Costamare |
| Safe Bulkers |
Costamare and Safe Bulkers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costamare and Safe Bulkers
The main advantage of trading using opposite Costamare and Safe Bulkers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costamare position performs unexpectedly, Safe Bulkers 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 Safe Bulkers will offset losses from the drop in Safe Bulkers' long position.| Costamare vs. Global Ship Lease | Costamare vs. Navios Maritime Partners | Costamare vs. Genco Shipping Trading | Costamare vs. Danaos |
| Safe Bulkers vs. Global Ship Lease | Safe Bulkers vs. Costamare | Safe Bulkers vs. Navios Maritime Partners | Safe Bulkers 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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