Correlation Between Oceanpal and Kirby
Can any of the company-specific risk be diversified away by investing in both Oceanpal and Kirby 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 Oceanpal and Kirby into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oceanpal and Kirby, you can compare the effects of market volatilities on Oceanpal and Kirby 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 Oceanpal with a short position of Kirby. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oceanpal and Kirby.
Diversification Opportunities for Oceanpal and Kirby
Very good diversification
The 3 months correlation between Oceanpal and Kirby is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Oceanpal and Kirby in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kirby and Oceanpal 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 Oceanpal are associated (or correlated) with Kirby. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kirby has no effect on the direction of Oceanpal i.e., Oceanpal and Kirby go up and down completely randomly.
Pair Corralation between Oceanpal and Kirby
Allowing for the 90-day total investment horizon Oceanpal is expected to under-perform the Kirby. In addition to that, Oceanpal is 1.2 times more volatile than Kirby. It trades about -0.25 of its total potential returns per unit of risk. Kirby is currently generating about 0.23 per unit of volatility. If you would invest 11,428 in Kirby on September 2, 2024 and sell it today you would earn a total of 1,223 from holding Kirby or generate 10.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oceanpal vs. Kirby
Performance |
| Timeline |
| Oceanpal |
| Kirby |
Oceanpal and Kirby Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oceanpal and Kirby
The main advantage of trading using opposite Oceanpal and Kirby positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oceanpal position performs unexpectedly, Kirby 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 Kirby will offset losses from the drop in Kirby's long position.| Oceanpal vs. Genco Shipping Trading | Oceanpal vs. Costamare | Oceanpal vs. Ardmore Shpng | Oceanpal vs. Global Ship Lease |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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