Correlation Between Euroseas and Safe Bulkers
Can any of the company-specific risk be diversified away by investing in both Euroseas and Safe Bulkers 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 Safe Bulkers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Euroseas and Safe Bulkers, you can compare the effects of market volatilities on Euroseas and Safe Bulkers 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 Safe Bulkers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euroseas and Safe Bulkers.
Diversification Opportunities for Euroseas and Safe Bulkers
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Euroseas and Safe is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Euroseas and Safe Bulkers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe Bulkers 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 Safe Bulkers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe Bulkers has no effect on the direction of Euroseas i.e., Euroseas and Safe Bulkers go up and down completely randomly.
Pair Corralation between Euroseas and Safe Bulkers
Given the investment horizon of 90 days Euroseas is expected to under-perform the Safe Bulkers. In addition to that, Euroseas is 1.18 times more volatile than Safe Bulkers. It trades about -0.11 of its total potential returns per unit of risk. Safe Bulkers is currently generating about -0.05 per unit of volatility. If you would invest 423.00 in Safe Bulkers on August 24, 2024 and sell it today you would lose (11.00) from holding Safe Bulkers or give up 2.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Euroseas vs. Safe Bulkers
Performance |
| Timeline |
| Euroseas |
| Safe Bulkers |
Euroseas and Safe Bulkers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Euroseas and Safe Bulkers
The main advantage of trading using opposite Euroseas and Safe Bulkers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Euroseas position performs unexpectedly, Safe Bulkers 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 Safe Bulkers will offset losses from the drop in Safe Bulkers' long position.| Euroseas vs. Pyxis Tankers | Euroseas vs. Pacific Basin Shipping | Euroseas vs. dAmico International Shipping | Euroseas vs. Danaos |
| Safe Bulkers vs. Global Ship Lease | Safe Bulkers vs. Costamare | Safe Bulkers vs. Navios Maritime Partners | Safe Bulkers vs. Genco Shipping Trading |
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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