Correlation Between Eagle Bulk and EuroDry
Can any of the company-specific risk be diversified away by investing in both Eagle Bulk and EuroDry 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 Eagle Bulk and EuroDry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Bulk Shipping and EuroDry, you can compare the effects of market volatilities on Eagle Bulk and EuroDry 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 Eagle Bulk with a short position of EuroDry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Bulk and EuroDry.
Diversification Opportunities for Eagle Bulk and EuroDry
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eagle and EuroDry is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bulk Shipping and EuroDry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EuroDry and Eagle Bulk 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 Eagle Bulk Shipping are associated (or correlated) with EuroDry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EuroDry has no effect on the direction of Eagle Bulk i.e., Eagle Bulk and EuroDry go up and down completely randomly.
Pair Corralation between Eagle Bulk and EuroDry
Given the investment horizon of 90 days Eagle Bulk Shipping is expected to generate 1.11 times more return on investment than EuroDry. However, Eagle Bulk is 1.11 times more volatile than EuroDry. It trades about 0.05 of its potential returns per unit of risk. EuroDry is currently generating about 0.01 per unit of risk. If you would invest 4,243 in Eagle Bulk Shipping on August 27, 2024 and sell it today you would earn a total of 107.00 from holding Eagle Bulk Shipping or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 9.38% |
| Values | Daily Returns |
Eagle Bulk Shipping vs. EuroDry
Performance |
| Timeline |
| Eagle Bulk Shipping |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| EuroDry |
Eagle Bulk and EuroDry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Bulk and EuroDry
The main advantage of trading using opposite Eagle Bulk and EuroDry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Bulk position performs unexpectedly, EuroDry 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 EuroDry will offset losses from the drop in EuroDry's long position.| Eagle Bulk vs. Star Bulk Carriers | Eagle Bulk vs. Golden Ocean Group | Eagle Bulk vs. Global Ship Lease | Eagle Bulk vs. Diana Shipping |
| EuroDry vs. Star Bulk Carriers | EuroDry vs. TOP Ships | EuroDry vs. Seanergy Maritime Holdings | EuroDry vs. Performance 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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