Correlation Between Kirby and United Maritime
Can any of the company-specific risk be diversified away by investing in both Kirby and United Maritime 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 United Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kirby and United Maritime, you can compare the effects of market volatilities on Kirby and United Maritime 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 United Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kirby and United Maritime.
Diversification Opportunities for Kirby and United Maritime
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kirby and United is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kirby and United Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Maritime 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 United Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Maritime has no effect on the direction of Kirby i.e., Kirby and United Maritime go up and down completely randomly.
Pair Corralation between Kirby and United Maritime
Considering the 90-day investment horizon Kirby is expected to generate 0.95 times more return on investment than United Maritime. However, Kirby is 1.05 times less risky than United Maritime. It trades about 0.17 of its potential returns per unit of risk. United Maritime is currently generating about 0.13 per unit of risk. 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kirby vs. United Maritime
Performance |
| Timeline |
| Kirby |
| United Maritime |
Kirby and United Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kirby and United Maritime
The main advantage of trading using opposite Kirby and United Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kirby position performs unexpectedly, United Maritime 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 United Maritime will offset losses from the drop in United Maritime's long position.The idea behind Kirby and United Maritime 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.| United Maritime vs. TOP Ships | United Maritime vs. Globus Maritime | United Maritime vs. Castor Maritime | United Maritime vs. Safe Bulkers |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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