Correlation Between Kirby and DAmico International
Can any of the company-specific risk be diversified away by investing in both Kirby and DAmico International 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 Kirby and DAmico International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kirby and dAmico International Shipping, you can compare the effects of market volatilities on Kirby and DAmico International 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 Kirby with a short position of DAmico International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kirby and DAmico International.
Diversification Opportunities for Kirby and DAmico International
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kirby and DAmico is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kirby and dAmico International Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on dAmico International and Kirby 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 Kirby are associated (or correlated) with DAmico International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of dAmico International has no effect on the direction of Kirby i.e., Kirby and DAmico International go up and down completely randomly.
Pair Corralation between Kirby and DAmico International
Considering the 90-day investment horizon Kirby is expected to generate 1.38 times less return on investment than DAmico International. But when comparing it to its historical volatility, Kirby is 2.43 times less risky than DAmico International. It trades about 0.08 of its potential returns per unit of risk. dAmico International Shipping is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 255.00 in dAmico International Shipping on August 24, 2024 and sell it today you would earn a total of 203.00 from holding dAmico International Shipping or generate 79.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Kirby vs. dAmico International Shipping
Performance |
| Timeline |
| Kirby |
| dAmico International |
Kirby and DAmico International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kirby and DAmico International
The main advantage of trading using opposite Kirby and DAmico International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kirby position performs unexpectedly, DAmico International 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 DAmico International will offset losses from the drop in DAmico International's long position.The idea behind Kirby and dAmico International Shipping 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.| DAmico International vs. Hapag Lloyd Aktiengesellschaft | DAmico International vs. AP Moeller Maersk AS | DAmico International vs. AP Mller | DAmico International vs. COSCO SHIPPING Holdings |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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