Correlation Between Diana Shipping and Aecon
Can any of the company-specific risk be diversified away by investing in both Diana Shipping and Aecon 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 Aecon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diana Shipping and Aecon Group, you can compare the effects of market volatilities on Diana Shipping and Aecon 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 Aecon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diana Shipping and Aecon.
Diversification Opportunities for Diana Shipping and Aecon
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Diana and Aecon is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Diana Shipping and Aecon Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aecon Group 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 Aecon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aecon Group has no effect on the direction of Diana Shipping i.e., Diana Shipping and Aecon go up and down completely randomly.
Pair Corralation between Diana Shipping and Aecon
Considering the 90-day investment horizon Diana Shipping is expected to under-perform the Aecon. But the stock apears to be less risky and, when comparing its historical volatility, Diana Shipping is 1.69 times less risky than Aecon. The stock trades about -0.04 of its potential returns per unit of risk. The Aecon Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 803.00 in Aecon Group on November 2, 2024 and sell it today you would earn a total of 839.00 from holding Aecon Group or generate 104.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 87.63% |
| Values | Daily Returns |
Diana Shipping vs. Aecon Group
Performance |
| Timeline |
| Diana Shipping |
| Aecon Group |
Diana Shipping and Aecon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diana Shipping and Aecon
The main advantage of trading using opposite Diana Shipping and Aecon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diana Shipping position performs unexpectedly, Aecon 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 Aecon will offset losses from the drop in Aecon's long position.| Diana Shipping vs. Star Bulk Carriers | Diana Shipping vs. Golden Ocean Group | Diana Shipping vs. Global Ship Lease | Diana Shipping vs. Genco Shipping Trading |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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