Correlation Between FLEX LNG and Okeanis Eco
Can any of the company-specific risk be diversified away by investing in both FLEX LNG and Okeanis Eco 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 FLEX LNG and Okeanis Eco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLEX LNG and Okeanis Eco Tankers, you can compare the effects of market volatilities on FLEX LNG and Okeanis Eco 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 FLEX LNG with a short position of Okeanis Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLEX LNG and Okeanis Eco.
Diversification Opportunities for FLEX LNG and Okeanis Eco
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between FLEX and Okeanis is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding FLEX LNG and Okeanis Eco Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okeanis Eco Tankers and FLEX LNG 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 FLEX LNG are associated (or correlated) with Okeanis Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okeanis Eco Tankers has no effect on the direction of FLEX LNG i.e., FLEX LNG and Okeanis Eco go up and down completely randomly.
Pair Corralation between FLEX LNG and Okeanis Eco
Assuming the 90 days trading horizon FLEX LNG is expected to generate 0.71 times more return on investment than Okeanis Eco. However, FLEX LNG is 1.41 times less risky than Okeanis Eco. It trades about 0.12 of its potential returns per unit of risk. Okeanis Eco Tankers is currently generating about -0.27 per unit of risk. If you would invest 26,930 in FLEX LNG on August 28, 2024 and sell it today you would earn a total of 1,370 from holding FLEX LNG or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FLEX LNG vs. Okeanis Eco Tankers
Performance |
| Timeline |
| FLEX LNG |
| Okeanis Eco Tankers |
FLEX LNG and Okeanis Eco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLEX LNG and Okeanis Eco
The main advantage of trading using opposite FLEX LNG and Okeanis Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLEX LNG position performs unexpectedly, Okeanis Eco 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 Okeanis Eco will offset losses from the drop in Okeanis Eco's long position.The idea behind FLEX LNG and Okeanis Eco Tankers pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Okeanis Eco vs. Hafnia | Okeanis Eco vs. 2020 Bulkers | Okeanis Eco vs. Hunter Group ASA | Okeanis Eco vs. Frontline |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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