Correlation Between Diana Shipping and Costamare
Can any of the company-specific risk be diversified away by investing in both Diana Shipping and Costamare 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 Costamare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diana Shipping and Costamare, you can compare the effects of market volatilities on Diana Shipping and Costamare 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 Costamare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diana Shipping and Costamare.
Diversification Opportunities for Diana Shipping and Costamare
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Diana and Costamare is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Diana Shipping and Costamare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costamare 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 Costamare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costamare has no effect on the direction of Diana Shipping i.e., Diana Shipping and Costamare go up and down completely randomly.
Pair Corralation between Diana Shipping and Costamare
Considering the 90-day investment horizon Diana Shipping is expected to generate 0.76 times more return on investment than Costamare. However, Diana Shipping is 1.31 times less risky than Costamare. It trades about -0.17 of its potential returns per unit of risk. Costamare is currently generating about -0.17 per unit of risk. If you would invest 196.00 in Diana Shipping on November 1, 2024 and sell it today you would lose (12.00) from holding Diana Shipping or give up 6.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diana Shipping vs. Costamare
Performance |
| Timeline |
| Diana Shipping |
| Costamare |
Diana Shipping and Costamare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diana Shipping and Costamare
The main advantage of trading using opposite Diana Shipping and Costamare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diana Shipping position performs unexpectedly, Costamare 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 Costamare will offset losses from the drop in Costamare'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 |
| Costamare vs. Global Ship Lease | Costamare vs. Navios Maritime Partners | Costamare vs. Genco Shipping Trading | Costamare vs. Danaos |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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