Correlation Between Diana Shipping and Castor Maritime
Can any of the company-specific risk be diversified away by investing in both Diana Shipping and Castor Maritime 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 Castor Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diana Shipping and Castor Maritime, you can compare the effects of market volatilities on Diana Shipping and Castor Maritime 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 Castor Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diana Shipping and Castor Maritime.
Diversification Opportunities for Diana Shipping and Castor Maritime
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Diana and Castor is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Diana Shipping and Castor Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castor Maritime 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 Castor Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castor Maritime has no effect on the direction of Diana Shipping i.e., Diana Shipping and Castor Maritime go up and down completely randomly.
Pair Corralation between Diana Shipping and Castor Maritime
Considering the 90-day investment horizon Diana Shipping is expected to under-perform the Castor Maritime. But the stock apears to be less risky and, when comparing its historical volatility, Diana Shipping is 1.21 times less risky than Castor Maritime. The stock trades about -0.07 of its potential returns per unit of risk. The Castor Maritime is currently generating about -0.04 of returns per unit of risk over similar time horizon. 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 |
Diana Shipping vs. Castor Maritime
Performance |
| Timeline |
| Diana Shipping |
| Castor Maritime |
Diana Shipping and Castor Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diana Shipping and Castor Maritime
The main advantage of trading using opposite Diana Shipping and Castor Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diana Shipping position performs unexpectedly, Castor Maritime 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 Castor Maritime will offset losses from the drop in Castor Maritime'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 |
| Castor Maritime vs. Seanergy Maritime Holdings | Castor Maritime vs. TOP Ships | Castor Maritime vs. United Maritime | Castor Maritime vs. Nordic American Tankers |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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