Correlation Between Okeanis Eco and BW LPG
Can any of the company-specific risk be diversified away by investing in both Okeanis Eco and BW LPG 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 Okeanis Eco and BW LPG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Okeanis Eco Tankers and BW LPG, you can compare the effects of market volatilities on Okeanis Eco and BW LPG 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 Okeanis Eco with a short position of BW LPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okeanis Eco and BW LPG.
Diversification Opportunities for Okeanis Eco and BW LPG
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Okeanis and BWLPG is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Okeanis Eco Tankers and BW LPG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW LPG and Okeanis Eco 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 Okeanis Eco Tankers are associated (or correlated) with BW LPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW LPG has no effect on the direction of Okeanis Eco i.e., Okeanis Eco and BW LPG go up and down completely randomly.
Pair Corralation between Okeanis Eco and BW LPG
Assuming the 90 days trading horizon Okeanis Eco Tankers is expected to under-perform the BW LPG. In addition to that, Okeanis Eco is 1.31 times more volatile than BW LPG. It trades about -0.27 of its total potential returns per unit of risk. BW LPG is currently generating about 0.0 per unit of volatility. If you would invest 14,570 in BW LPG on August 28, 2024 and sell it today you would lose (70.00) from holding BW LPG or give up 0.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Okeanis Eco Tankers vs. BW LPG
Performance |
| Timeline |
| Okeanis Eco Tankers |
| BW LPG |
Okeanis Eco and BW LPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Okeanis Eco and BW LPG
The main advantage of trading using opposite Okeanis Eco and BW LPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Okeanis Eco position performs unexpectedly, BW LPG 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 BW LPG will offset losses from the drop in BW LPG's long position.| Okeanis Eco vs. Hafnia | Okeanis Eco vs. 2020 Bulkers | Okeanis Eco vs. Hunter Group ASA | Okeanis Eco vs. Frontline |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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