Correlation Between DAmico International and Danaos
Can any of the company-specific risk be diversified away by investing in both DAmico International and Danaos 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 DAmico International and Danaos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between dAmico International Shipping and Danaos, you can compare the effects of market volatilities on DAmico International and Danaos 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 DAmico International with a short position of Danaos. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAmico International and Danaos.
Diversification Opportunities for DAmico International and Danaos
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between DAmico and Danaos is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding dAmico International Shipping and Danaos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danaos and DAmico International 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 dAmico International Shipping are associated (or correlated) with Danaos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danaos has no effect on the direction of DAmico International i.e., DAmico International and Danaos go up and down completely randomly.
Pair Corralation between DAmico International and Danaos
Assuming the 90 days horizon dAmico International Shipping is expected to generate 2.53 times more return on investment than Danaos. However, DAmico International is 2.53 times more volatile than Danaos. It trades about 0.04 of its potential returns per unit of risk. Danaos is currently generating about 0.07 per unit of risk. If you would invest 255.00 in dAmico International Shipping on August 28, 2024 and sell it today you would earn a total of 180.00 from holding dAmico International Shipping or generate 70.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
dAmico International Shipping vs. Danaos
Performance |
| Timeline |
| dAmico International |
| Danaos |
DAmico International and Danaos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAmico International and Danaos
The main advantage of trading using opposite DAmico International and Danaos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAmico International position performs unexpectedly, Danaos 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 Danaos will offset losses from the drop in Danaos' long position.| DAmico International vs. Western Bulk Chartering | DAmico International vs. AP Moeller | DAmico International vs. AP Mller | DAmico International vs. EuroDry |
| Danaos vs. Genco Shipping Trading | Danaos vs. Costamare | Danaos vs. Ardmore Shpng | Danaos vs. Global Ship Lease |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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