Correlation Between Diana Shipping and Performance Shipping
Can any of the company-specific risk be diversified away by investing in both Diana Shipping and Performance Shipping 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 Performance Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diana Shipping and Performance Shipping, you can compare the effects of market volatilities on Diana Shipping and Performance Shipping 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 Performance Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diana Shipping and Performance Shipping.
Diversification Opportunities for Diana Shipping and Performance Shipping
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Diana and Performance is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Diana Shipping and Performance Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Shipping 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 Performance Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Shipping has no effect on the direction of Diana Shipping i.e., Diana Shipping and Performance Shipping go up and down completely randomly.
Pair Corralation between Diana Shipping and Performance Shipping
Considering the 90-day investment horizon Diana Shipping is expected to under-perform the Performance Shipping. But the stock apears to be less risky and, when comparing its historical volatility, Diana Shipping is 2.3 times less risky than Performance Shipping. The stock trades about -0.05 of its potential returns per unit of risk. The Performance Shipping is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 269.00 in Performance Shipping on November 9, 2024 and sell it today you would lose (105.00) from holding Performance Shipping or give up 39.03% 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. Performance Shipping
Performance |
| Timeline |
| Diana Shipping |
| Performance Shipping |
Diana Shipping and Performance Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diana Shipping and Performance Shipping
The main advantage of trading using opposite Diana Shipping and Performance Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diana Shipping position performs unexpectedly, Performance Shipping 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 Performance Shipping will offset losses from the drop in Performance Shipping'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 |
| Performance Shipping vs. Genco Shipping Trading | Performance Shipping vs. Golden Ocean Group | Performance Shipping vs. Star Bulk Carriers | Performance Shipping vs. Oceanpal |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |