Correlation Between Himalaya Shipping and Kirby
Can any of the company-specific risk be diversified away by investing in both Himalaya Shipping and Kirby 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 Himalaya Shipping and Kirby into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Himalaya Shipping and Kirby, you can compare the effects of market volatilities on Himalaya Shipping and Kirby 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 Himalaya Shipping with a short position of Kirby. Check out your portfolio center. Please also check ongoing floating volatility patterns of Himalaya Shipping and Kirby.
Diversification Opportunities for Himalaya Shipping and Kirby
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Himalaya and Kirby is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Himalaya Shipping and Kirby in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kirby and Himalaya Shipping 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 Himalaya Shipping are associated (or correlated) with Kirby. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kirby has no effect on the direction of Himalaya Shipping i.e., Himalaya Shipping and Kirby go up and down completely randomly.
Pair Corralation between Himalaya Shipping and Kirby
Given the investment horizon of 90 days Himalaya Shipping is expected to under-perform the Kirby. In addition to that, Himalaya Shipping is 1.53 times more volatile than Kirby. It trades about -0.03 of its total potential returns per unit of risk. Kirby is currently generating about 0.17 per unit of volatility. If you would invest 10,580 in Kirby on November 1, 2024 and sell it today you would earn a total of 632.00 from holding Kirby or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Himalaya Shipping vs. Kirby
Performance |
| Timeline |
| Himalaya Shipping |
| Kirby |
Himalaya Shipping and Kirby Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Himalaya Shipping and Kirby
The main advantage of trading using opposite Himalaya Shipping and Kirby positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Himalaya Shipping position performs unexpectedly, Kirby 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 Kirby will offset losses from the drop in Kirby's long position.| Himalaya Shipping vs. Q2 Holdings | Himalaya Shipping vs. Weyco Group | Himalaya Shipping vs. Sapiens International | Himalaya Shipping vs. Uber Technologies |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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