Correlation Between Costamare and Star Bulk
Can any of the company-specific risk be diversified away by investing in both Costamare and Star Bulk 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 Star Bulk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Costamare and Star Bulk Carriers, you can compare the effects of market volatilities on Costamare and Star Bulk 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 Star Bulk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costamare and Star Bulk.
Diversification Opportunities for Costamare and Star Bulk
Poor diversification
The 3 months correlation between Costamare and Star is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Costamare and Star Bulk Carriers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Bulk Carriers 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 Star Bulk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Bulk Carriers has no effect on the direction of Costamare i.e., Costamare and Star Bulk go up and down completely randomly.
Pair Corralation between Costamare and Star Bulk
Given the investment horizon of 90 days Costamare is expected to under-perform the Star Bulk. In addition to that, Costamare is 1.02 times more volatile than Star Bulk Carriers. It trades about -0.26 of its total potential returns per unit of risk. Star Bulk Carriers is currently generating about -0.17 per unit of volatility. If you would invest 1,971 in Star Bulk Carriers on November 18, 2024 and sell it today you would lose (361.00) from holding Star Bulk Carriers or give up 18.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Costamare vs. Star Bulk Carriers
Performance |
| Timeline |
| Costamare |
| Star Bulk Carriers |
Costamare and Star Bulk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Costamare and Star Bulk
The main advantage of trading using opposite Costamare and Star Bulk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Costamare position performs unexpectedly, Star Bulk 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 Star Bulk will offset losses from the drop in Star Bulk's long position.| Costamare vs. Global Ship Lease | Costamare vs. Navios Maritime Partners | Costamare vs. Genco Shipping Trading | Costamare vs. Danaos |
| Star Bulk vs. Genco Shipping Trading | Star Bulk vs. Diana Shipping | Star Bulk vs. Danaos | Star Bulk vs. Golden Ocean Group |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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