Correlation Between Castor Maritime and Performance Shipping
Can any of the company-specific risk be diversified away by investing in both Castor Maritime and Performance 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 Castor Maritime and Performance Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Castor Maritime and Performance Shipping, you can compare the effects of market volatilities on Castor Maritime and Performance 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 Castor Maritime with a short position of Performance Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castor Maritime and Performance Shipping.
Diversification Opportunities for Castor Maritime and Performance Shipping
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Castor and Performance is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Castor Maritime and Performance Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Shipping and Castor Maritime 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 Castor Maritime are associated (or correlated) with Performance Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Shipping has no effect on the direction of Castor Maritime i.e., Castor Maritime and Performance Shipping go up and down completely randomly.
Pair Corralation between Castor Maritime and Performance Shipping
Given the investment horizon of 90 days Castor Maritime is expected to generate 0.58 times more return on investment than Performance Shipping. However, Castor Maritime is 1.73 times less risky than Performance Shipping. It trades about -0.04 of its potential returns per unit of risk. Performance Shipping is currently generating about -0.19 per unit of risk. If you would invest 272.00 in Castor Maritime on November 9, 2024 and sell it today you would lose (4.00) from holding Castor Maritime or give up 1.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Castor Maritime vs. Performance Shipping
Performance |
| Timeline |
| Castor Maritime |
| Performance Shipping |
Castor Maritime and Performance Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Castor Maritime and Performance Shipping
The main advantage of trading using opposite Castor Maritime and Performance Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castor Maritime position performs unexpectedly, Performance 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 Performance Shipping will offset losses from the drop in Performance Shipping's long position.| Castor Maritime vs. Seanergy Maritime Holdings | Castor Maritime vs. TOP Ships | Castor Maritime vs. United Maritime | Castor Maritime vs. Nordic American Tankers |
| Performance Shipping vs. Genco Shipping Trading | Performance Shipping vs. Golden Ocean Group | Performance Shipping vs. Star Bulk Carriers | Performance Shipping vs. Oceanpal |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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