Correlation Between Kirby and Pangaea Logistic
Can any of the company-specific risk be diversified away by investing in both Kirby and Pangaea Logistic 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 Pangaea Logistic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kirby and Pangaea Logistic, you can compare the effects of market volatilities on Kirby and Pangaea Logistic 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 Pangaea Logistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kirby and Pangaea Logistic.
Diversification Opportunities for Kirby and Pangaea Logistic
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kirby and Pangaea is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kirby and Pangaea Logistic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pangaea Logistic 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 Pangaea Logistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pangaea Logistic has no effect on the direction of Kirby i.e., Kirby and Pangaea Logistic go up and down completely randomly.
Pair Corralation between Kirby and Pangaea Logistic
Considering the 90-day investment horizon Kirby is expected to generate 0.98 times more return on investment than Pangaea Logistic. However, Kirby is 1.02 times less risky than Pangaea Logistic. It trades about 0.06 of its potential returns per unit of risk. Pangaea Logistic is currently generating about -0.05 per unit of risk. If you would invest 10,504 in Kirby on November 9, 2024 and sell it today you would earn a total of 211.00 from holding Kirby or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kirby vs. Pangaea Logistic
Performance |
| Timeline |
| Kirby |
| Pangaea Logistic |
Kirby and Pangaea Logistic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kirby and Pangaea Logistic
The main advantage of trading using opposite Kirby and Pangaea Logistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kirby position performs unexpectedly, Pangaea Logistic 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 Pangaea Logistic will offset losses from the drop in Pangaea Logistic's long position.The idea behind Kirby and Pangaea Logistic 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.| Pangaea Logistic vs. EuroDry | Pangaea Logistic vs. Costamare | Pangaea Logistic vs. Global Ship Lease | Pangaea Logistic vs. Danaos |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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