Correlation Between Kirby and Overseas Shipholding
Can any of the company-specific risk be diversified away by investing in both Kirby and Overseas Shipholding 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 Overseas Shipholding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kirby and Overseas Shipholding Group, you can compare the effects of market volatilities on Kirby and Overseas Shipholding 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 Overseas Shipholding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kirby and Overseas Shipholding.
Diversification Opportunities for Kirby and Overseas Shipholding
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kirby and Overseas is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Kirby and Overseas Shipholding Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Overseas Shipholding 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 Overseas Shipholding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Overseas Shipholding has no effect on the direction of Kirby i.e., Kirby and Overseas Shipholding go up and down completely randomly.
Pair Corralation between Kirby and Overseas Shipholding
If you would invest 11,476 in Kirby on September 1, 2024 and sell it today you would earn a total of 1,175 from holding Kirby or generate 10.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Kirby vs. Overseas Shipholding Group
Performance |
| Timeline |
| Kirby |
| Overseas Shipholding |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kirby and Overseas Shipholding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kirby and Overseas Shipholding
The main advantage of trading using opposite Kirby and Overseas Shipholding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kirby position performs unexpectedly, Overseas Shipholding 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 Overseas Shipholding will offset losses from the drop in Overseas Shipholding's long position.The idea behind Kirby and Overseas Shipholding Group 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.| Overseas Shipholding vs. Teekay | Overseas Shipholding vs. Frontline | Overseas Shipholding vs. Alexander Baldwin Holdings | Overseas Shipholding vs. Torm PLC Class |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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