Correlation Between Oceanpal and Kirby

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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

OceanpalKirbyDiversified AwayOceanpalKirbyDiversified Away100%
0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Oceanpal and Kirby is 0.86. 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. But the stock apears to be less risky and, when comparing its historical volatility, Oceanpal is 1.43 times less risky than Kirby. The stock trades about -0.33 of its potential returns per unit of risk. The Kirby is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  10,665  in Kirby on November 27, 2024 and sell it today you would lose (535.00) from holding Kirby or give up 5.02% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Oceanpal  vs.  Kirby

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -25-20-15-10-50
JavaScript chart by amCharts 3.21.15OP KEX
       Timeline  
Oceanpal 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Oceanpal has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.11.21.31.41.5
Kirby 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Kirby has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb100105110115120125130

Oceanpal and Kirby Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.72-3.53-2.35-1.17-0.01690.981.993.04.025.03 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15OP KEX
       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.
The idea behind Oceanpal and Kirby 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.
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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