Correlation Between EuroDry and Pangaea Logistic
Can any of the company-specific risk be diversified away by investing in both EuroDry and Pangaea Logistic 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 Pangaea Logistic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EuroDry and Pangaea Logistic, you can compare the effects of market volatilities on EuroDry and Pangaea Logistic 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 Pangaea Logistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of EuroDry and Pangaea Logistic.
Diversification Opportunities for EuroDry and Pangaea Logistic
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EuroDry and Pangaea is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding EuroDry and Pangaea Logistic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pangaea Logistic 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 Pangaea Logistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pangaea Logistic has no effect on the direction of EuroDry i.e., EuroDry and Pangaea Logistic go up and down completely randomly.
Pair Corralation between EuroDry and Pangaea Logistic
Given the investment horizon of 90 days EuroDry is expected to under-perform the Pangaea Logistic. But the stock apears to be less risky and, when comparing its historical volatility, EuroDry is 1.05 times less risky than Pangaea Logistic. The stock trades about -0.6 of its potential returns per unit of risk. The Pangaea Logistic is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 622.00 in Pangaea Logistic on August 28, 2024 and sell it today you would lose (43.00) from holding Pangaea Logistic or give up 6.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EuroDry vs. Pangaea Logistic
Performance |
| Timeline |
| EuroDry |
| Pangaea Logistic |
EuroDry and Pangaea Logistic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EuroDry and Pangaea Logistic
The main advantage of trading using opposite EuroDry and Pangaea Logistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EuroDry position performs unexpectedly, Pangaea Logistic 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 Pangaea Logistic will offset losses from the drop in Pangaea Logistic's long position.| EuroDry vs. Star Bulk Carriers | EuroDry vs. TOP Ships | EuroDry vs. Seanergy Maritime Holdings | EuroDry vs. Performance Shipping |
| Pangaea Logistic vs. EuroDry | Pangaea Logistic vs. Costamare | Pangaea Logistic vs. Global Ship Lease | Pangaea Logistic 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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