Correlation Between Capital Product and Himalaya Shipping
Can any of the company-specific risk be diversified away by investing in both Capital Product 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 Capital Product and Himalaya Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Product Partners and Himalaya Shipping, you can compare the effects of market volatilities on Capital Product 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 Capital Product with a short position of Himalaya Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Product and Himalaya Shipping.
Diversification Opportunities for Capital Product and Himalaya Shipping
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Capital and Himalaya is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Capital Product Partners and Himalaya Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Himalaya Shipping and Capital Product 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 Capital Product Partners 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 Capital Product i.e., Capital Product and Himalaya Shipping go up and down completely randomly.
Pair Corralation between Capital Product and Himalaya Shipping
Given the investment horizon of 90 days Capital Product Partners is expected to under-perform the Himalaya Shipping. In addition to that, Capital Product is 1.74 times more volatile than Himalaya Shipping. It trades about -0.03 of its total potential returns per unit of risk. Himalaya Shipping is currently generating about 0.04 per unit of volatility. If you would invest 466.00 in Himalaya Shipping on August 28, 2024 and sell it today you would earn a total of 207.00 from holding Himalaya Shipping or generate 44.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.76% |
| Values | Daily Returns |
Capital Product Partners vs. Himalaya Shipping
Performance |
| Timeline |
| Capital Product Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Himalaya Shipping |
Capital Product and Himalaya Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Product and Himalaya Shipping
The main advantage of trading using opposite Capital Product and Himalaya Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Product 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.| Capital Product vs. Danaos | Capital Product vs. Global Ship Lease | Capital Product vs. Euroseas | Capital Product vs. Navios Maritime Partners |
| Himalaya Shipping vs. Solstad Offshore ASA | Himalaya Shipping vs. MYR Group | Himalaya Shipping vs. Chester Mining | Himalaya Shipping vs. Park Ohio Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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