Correlation Between Hapag-Lloyd Aktiengesellscha and Star Bulk
Can any of the company-specific risk be diversified away by investing in both Hapag-Lloyd Aktiengesellscha and Star Bulk 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 Hapag-Lloyd Aktiengesellscha and Star Bulk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hapag Lloyd Aktiengesellschaft and Star Bulk Carriers, you can compare the effects of market volatilities on Hapag-Lloyd Aktiengesellscha and Star Bulk 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 Hapag-Lloyd Aktiengesellscha with a short position of Star Bulk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hapag-Lloyd Aktiengesellscha and Star Bulk.
Diversification Opportunities for Hapag-Lloyd Aktiengesellscha and Star Bulk
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hapag-Lloyd and Star is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hapag Lloyd Aktiengesellschaft and Star Bulk Carriers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Bulk Carriers and Hapag-Lloyd Aktiengesellscha 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 Hapag Lloyd Aktiengesellschaft are associated (or correlated) with Star Bulk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Bulk Carriers has no effect on the direction of Hapag-Lloyd Aktiengesellscha i.e., Hapag-Lloyd Aktiengesellscha and Star Bulk go up and down completely randomly.
Pair Corralation between Hapag-Lloyd Aktiengesellscha and Star Bulk
Assuming the 90 days horizon Hapag Lloyd Aktiengesellschaft is expected to generate 2.0 times more return on investment than Star Bulk. However, Hapag-Lloyd Aktiengesellscha is 2.0 times more volatile than Star Bulk Carriers. It trades about -0.02 of its potential returns per unit of risk. Star Bulk Carriers is currently generating about -0.13 per unit of risk. If you would invest 18,700 in Hapag Lloyd Aktiengesellschaft on August 28, 2024 and sell it today you would lose (2,865) from holding Hapag Lloyd Aktiengesellschaft or give up 15.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Hapag Lloyd Aktiengesellschaft vs. Star Bulk Carriers
Performance |
| Timeline |
| Hapag-Lloyd Aktiengesellscha |
| Star Bulk Carriers |
Hapag-Lloyd Aktiengesellscha and Star Bulk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hapag-Lloyd Aktiengesellscha and Star Bulk
The main advantage of trading using opposite Hapag-Lloyd Aktiengesellscha and Star Bulk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hapag-Lloyd Aktiengesellscha position performs unexpectedly, Star Bulk 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 Star Bulk will offset losses from the drop in Star Bulk's long position.The idea behind Hapag Lloyd Aktiengesellschaft and Star Bulk Carriers 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.| Star Bulk vs. Genco Shipping Trading | Star Bulk vs. Diana Shipping | Star Bulk vs. Danaos | Star Bulk vs. Golden Ocean Group |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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