Correlation Between Euroseas and Globus Maritime
Can any of the company-specific risk be diversified away by investing in both Euroseas and Globus Maritime 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 Globus Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Euroseas and Globus Maritime, you can compare the effects of market volatilities on Euroseas and Globus Maritime 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 Globus Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euroseas and Globus Maritime.
Diversification Opportunities for Euroseas and Globus Maritime
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Euroseas and Globus is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Euroseas and Globus Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globus Maritime 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 Globus Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globus Maritime has no effect on the direction of Euroseas i.e., Euroseas and Globus Maritime go up and down completely randomly.
Pair Corralation between Euroseas and Globus Maritime
Given the investment horizon of 90 days Euroseas is expected to generate 0.59 times more return on investment than Globus Maritime. However, Euroseas is 1.69 times less risky than Globus Maritime. It trades about -0.1 of its potential returns per unit of risk. Globus Maritime is currently generating about -0.15 per unit of risk. If you would invest 4,110 in Euroseas on August 30, 2024 and sell it today you would lose (243.00) from holding Euroseas or give up 5.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Euroseas vs. Globus Maritime
Performance |
| Timeline |
| Euroseas |
| Globus Maritime |
Euroseas and Globus Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Euroseas and Globus Maritime
The main advantage of trading using opposite Euroseas and Globus Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Euroseas position performs unexpectedly, Globus Maritime 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 Globus Maritime will offset losses from the drop in Globus Maritime's long position.| Euroseas vs. Pyxis Tankers | Euroseas vs. Pacific Basin Shipping | Euroseas vs. dAmico International Shipping | Euroseas vs. Danaos |
| Globus Maritime vs. Seanergy Maritime Holdings | Globus Maritime vs. United Maritime | Globus Maritime vs. Performance Shipping | Globus Maritime vs. Castor Maritime |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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