Correlation Between Euroseas and Costamare
Can any of the company-specific risk be diversified away by investing in both Euroseas and Costamare 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 Euroseas and Costamare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Euroseas and Costamare, you can compare the effects of market volatilities on Euroseas and Costamare 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 Euroseas with a short position of Costamare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euroseas and Costamare.
Diversification Opportunities for Euroseas and Costamare
Very good diversification
The 3 months correlation between Euroseas and Costamare is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Euroseas and Costamare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costamare and Euroseas 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 Euroseas are associated (or correlated) with Costamare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costamare has no effect on the direction of Euroseas i.e., Euroseas and Costamare go up and down completely randomly.
Pair Corralation between Euroseas and Costamare
Given the investment horizon of 90 days Euroseas is expected to generate 4.8 times more return on investment than Costamare. However, Euroseas is 4.8 times more volatile than Costamare. It trades about 0.08 of its potential returns per unit of risk. Costamare is currently generating about 0.06 per unit of risk. If you would invest 1,740 in Euroseas on August 27, 2024 and sell it today you would earn a total of 2,333 from holding Euroseas or generate 134.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Euroseas vs. Costamare
Performance |
| Timeline |
| Euroseas |
| Costamare |
Euroseas and Costamare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Euroseas and Costamare
The main advantage of trading using opposite Euroseas and Costamare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Euroseas position performs unexpectedly, Costamare 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 Costamare will offset losses from the drop in Costamare's long position.| Euroseas vs. Star Bulk Carriers | Euroseas vs. TOP Ships | Euroseas vs. Seanergy Maritime Holdings | Euroseas vs. Performance Shipping |
| Costamare vs. Costamare | Costamare vs. Global Ship Lease | Costamare vs. Diana Shipping | Costamare vs. Costamare |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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