Correlation Between Diana Shipping and Safe Bulkers
Can any of the company-specific risk be diversified away by investing in both Diana Shipping 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 Diana Shipping and Safe Bulkers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diana Shipping and Safe Bulkers, you can compare the effects of market volatilities on Diana Shipping 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 Diana Shipping with a short position of Safe Bulkers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diana Shipping and Safe Bulkers.
Diversification Opportunities for Diana Shipping and Safe Bulkers
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Diana and Safe is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Diana Shipping and Safe Bulkers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe Bulkers and Diana Shipping 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 Diana Shipping 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 Diana Shipping i.e., Diana Shipping and Safe Bulkers go up and down completely randomly.
Pair Corralation between Diana Shipping and Safe Bulkers
Assuming the 90 days trading horizon Diana Shipping is expected to generate 1.39 times more return on investment than Safe Bulkers. However, Diana Shipping is 1.39 times more volatile than Safe Bulkers. It trades about 0.06 of its potential returns per unit of risk. Safe Bulkers is currently generating about 0.07 per unit of risk. If you would invest 2,140 in Diana Shipping on November 2, 2024 and sell it today you would earn a total of 505.00 from holding Diana Shipping or generate 23.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.79% |
| Values | Daily Returns |
Diana Shipping vs. Safe Bulkers
Performance |
| Timeline |
| Diana Shipping |
| Safe Bulkers |
Diana Shipping and Safe Bulkers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diana Shipping and Safe Bulkers
The main advantage of trading using opposite Diana Shipping and Safe Bulkers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diana Shipping 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.| Diana Shipping vs. Global Ship Lease | Diana Shipping vs. Safe Bulkers | Diana Shipping vs. Costamare | Diana Shipping vs. Safe Bulkers |
| Safe Bulkers vs. Safe Bulkers | Safe Bulkers vs. Global Ship Lease | Safe Bulkers vs. Diana Shipping | Safe Bulkers vs. Costamare |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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