Correlation Between StealthGas and Matson
Can any of the company-specific risk be diversified away by investing in both StealthGas and Matson 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 StealthGas and Matson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between StealthGas and Matson Inc, you can compare the effects of market volatilities on StealthGas and Matson 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 StealthGas with a short position of Matson. Check out your portfolio center. Please also check ongoing floating volatility patterns of StealthGas and Matson.
Diversification Opportunities for StealthGas and Matson
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between StealthGas and Matson is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding StealthGas and Matson Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matson Inc and StealthGas 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 StealthGas are associated (or correlated) with Matson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matson Inc has no effect on the direction of StealthGas i.e., StealthGas and Matson go up and down completely randomly.
Pair Corralation between StealthGas and Matson
Given the investment horizon of 90 days StealthGas is expected to under-perform the Matson. But the stock apears to be less risky and, when comparing its historical volatility, StealthGas is 1.91 times less risky than Matson. The stock trades about -0.03 of its potential returns per unit of risk. The Matson Inc is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 13,091 in Matson Inc on August 24, 2024 and sell it today you would earn a total of 2,173 from holding Matson Inc or generate 16.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
StealthGas vs. Matson Inc
Performance |
| Timeline |
| StealthGas |
| Matson Inc |
StealthGas and Matson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with StealthGas and Matson
The main advantage of trading using opposite StealthGas and Matson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StealthGas position performs unexpectedly, Matson 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 Matson will offset losses from the drop in Matson's long position.| StealthGas vs. Danaos | StealthGas vs. Global Ship Lease | StealthGas vs. Euroseas | StealthGas vs. Navios Maritime Partners |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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