Correlation Between Kirby and Safe Bulkers
Can any of the company-specific risk be diversified away by investing in both Kirby and Safe Bulkers 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 Safe Bulkers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kirby and Safe Bulkers, you can compare the effects of market volatilities on Kirby and Safe Bulkers 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 Safe Bulkers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kirby and Safe Bulkers.
Diversification Opportunities for Kirby and Safe Bulkers
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kirby and Safe is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kirby and Safe Bulkers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe Bulkers 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 Safe Bulkers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe Bulkers has no effect on the direction of Kirby i.e., Kirby and Safe Bulkers go up and down completely randomly.
Pair Corralation between Kirby and Safe Bulkers
Considering the 90-day investment horizon Kirby is expected to generate 4.61 times more return on investment than Safe Bulkers. However, Kirby is 4.61 times more volatile than Safe Bulkers. It trades about 0.2 of its potential returns per unit of risk. Safe Bulkers is currently generating about -0.17 per unit of risk. If you would invest 11,559 in Kirby on August 31, 2024 and sell it today you would earn a total of 1,077 from holding Kirby or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kirby vs. Safe Bulkers
Performance |
| Timeline |
| Kirby |
| Safe Bulkers |
Kirby and Safe Bulkers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kirby and Safe Bulkers
The main advantage of trading using opposite Kirby and Safe Bulkers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kirby position performs unexpectedly, Safe Bulkers 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 Safe Bulkers will offset losses from the drop in Safe Bulkers' long position.| Kirby vs. Safe Bulkers | Kirby vs. Safe Bulkers | Kirby vs. Diana Shipping | Kirby vs. Genco Shipping Trading |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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