Correlation Between EuroDry and Eagle Bulk
Can any of the company-specific risk be diversified away by investing in both EuroDry and Eagle Bulk 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 EuroDry and Eagle Bulk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EuroDry and Eagle Bulk Shipping, you can compare the effects of market volatilities on EuroDry and Eagle Bulk 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 EuroDry with a short position of Eagle Bulk. Check out your portfolio center. Please also check ongoing floating volatility patterns of EuroDry and Eagle Bulk.
Diversification Opportunities for EuroDry and Eagle Bulk
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EuroDry and Eagle is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding EuroDry and Eagle Bulk Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Bulk Shipping and EuroDry 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 EuroDry are associated (or correlated) with Eagle Bulk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Bulk Shipping has no effect on the direction of EuroDry i.e., EuroDry and Eagle Bulk go up and down completely randomly.
Pair Corralation between EuroDry and Eagle Bulk
Given the investment horizon of 90 days EuroDry is expected to generate 0.72 times more return on investment than Eagle Bulk. However, EuroDry is 1.4 times less risky than Eagle Bulk. It trades about 0.0 of its potential returns per unit of risk. Eagle Bulk Shipping is currently generating about -0.02 per unit of risk. If you would invest 1,593 in EuroDry on August 27, 2024 and sell it today you would lose (183.00) from holding EuroDry or give up 11.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.85% |
| Values | Daily Returns |
EuroDry vs. Eagle Bulk Shipping
Performance |
| Timeline |
| EuroDry |
| Eagle Bulk Shipping |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
EuroDry and Eagle Bulk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EuroDry and Eagle Bulk
The main advantage of trading using opposite EuroDry and Eagle Bulk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EuroDry position performs unexpectedly, Eagle Bulk 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 Eagle Bulk will offset losses from the drop in Eagle Bulk's long position.| EuroDry vs. Star Bulk Carriers | EuroDry vs. TOP Ships | EuroDry vs. Seanergy Maritime Holdings | EuroDry vs. Performance Shipping |
| Eagle Bulk vs. Star Bulk Carriers | Eagle Bulk vs. Golden Ocean Group | Eagle Bulk vs. Global Ship Lease | Eagle Bulk vs. Diana Shipping |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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