Correlation Between Euroseas and United Maritime
Can any of the company-specific risk be diversified away by investing in both Euroseas and United 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 United Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Euroseas and United Maritime, you can compare the effects of market volatilities on Euroseas and United 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 United Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Euroseas and United Maritime.
Diversification Opportunities for Euroseas and United Maritime
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Euroseas and United is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Euroseas and United Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United 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 United Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Maritime has no effect on the direction of Euroseas i.e., Euroseas and United Maritime go up and down completely randomly.
Pair Corralation between Euroseas and United Maritime
Given the investment horizon of 90 days Euroseas is expected to generate 25.75 times less return on investment than United Maritime. But when comparing it to its historical volatility, Euroseas is 1.23 times less risky than United Maritime. It trades about 0.01 of its potential returns per unit of risk. United Maritime is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 174.00 in United Maritime on October 20, 2024 and sell it today you would earn a total of 13.00 from holding United Maritime or generate 7.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Euroseas vs. United Maritime
Performance |
| Timeline |
| Euroseas |
| United Maritime |
Euroseas and United Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Euroseas and United Maritime
The main advantage of trading using opposite Euroseas and United Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Euroseas position performs unexpectedly, United 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 United Maritime will offset losses from the drop in United Maritime's long position.| Euroseas vs. Pyxis Tankers | Euroseas vs. Pacific Basin Shipping | Euroseas vs. dAmico International Shipping | Euroseas vs. Danaos |
| United Maritime vs. TOP Ships | United Maritime vs. Globus Maritime | United Maritime vs. Castor Maritime | United Maritime vs. Safe Bulkers |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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