Correlation Between Euroseas and Pangaea Logistic
Can any of the company-specific risk be diversified away by investing in both Euroseas 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 Euroseas and Pangaea Logistic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Euroseas and Pangaea Logistic, you can compare the effects of market volatilities on Euroseas 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 Euroseas with a short position of Pangaea Logistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euroseas and Pangaea Logistic.
Diversification Opportunities for Euroseas and Pangaea Logistic
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Euroseas and Pangaea is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Euroseas and Pangaea Logistic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pangaea Logistic 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 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 Euroseas i.e., Euroseas and Pangaea Logistic go up and down completely randomly.
Pair Corralation between Euroseas and Pangaea Logistic
Given the investment horizon of 90 days Euroseas is expected to generate 1.26 times more return on investment than Pangaea Logistic. However, Euroseas is 1.26 times more volatile than Pangaea Logistic. It trades about 0.01 of its potential returns per unit of risk. Pangaea Logistic is currently generating about -0.05 per unit of risk. If you would invest 3,358 in Euroseas on November 9, 2024 and sell it today you would lose (97.00) from holding Euroseas or give up 2.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Euroseas vs. Pangaea Logistic
Performance |
| Timeline |
| Euroseas |
| Pangaea Logistic |
Euroseas and Pangaea Logistic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Euroseas and Pangaea Logistic
The main advantage of trading using opposite Euroseas and Pangaea Logistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Euroseas 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.| Euroseas vs. Pyxis Tankers | Euroseas vs. Pacific Basin Shipping | Euroseas vs. dAmico International Shipping | Euroseas vs. Danaos |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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