Correlation Between Oceanpal and Star Bulk
Can any of the company-specific risk be diversified away by investing in both Oceanpal and Star Bulk 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 Star Bulk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oceanpal and Star Bulk Carriers, you can compare the effects of market volatilities on Oceanpal and Star Bulk 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 Star Bulk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oceanpal and Star Bulk.
Diversification Opportunities for Oceanpal and Star Bulk
Very poor diversification
The 3 months correlation between Oceanpal and Star is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Oceanpal and Star Bulk Carriers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Bulk Carriers 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 Star Bulk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Bulk Carriers has no effect on the direction of Oceanpal i.e., Oceanpal and Star Bulk go up and down completely randomly.
Pair Corralation between Oceanpal and Star Bulk
Allowing for the 90-day total investment horizon Oceanpal is expected to under-perform the Star Bulk. In addition to that, Oceanpal is 1.65 times more volatile than Star Bulk Carriers. It trades about -0.03 of its total potential returns per unit of risk. Star Bulk Carriers is currently generating about 0.09 per unit of volatility. If you would invest 1,495 in Star Bulk Carriers on November 1, 2024 and sell it today you would earn a total of 49.50 from holding Star Bulk Carriers or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oceanpal vs. Star Bulk Carriers
Performance |
| Timeline |
| Oceanpal |
| Star Bulk Carriers |
Oceanpal and Star Bulk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oceanpal and Star Bulk
The main advantage of trading using opposite Oceanpal and Star Bulk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oceanpal position performs unexpectedly, Star Bulk 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 Star Bulk will offset losses from the drop in Star Bulk's long position.| Oceanpal vs. Genco Shipping Trading | Oceanpal vs. Golden Ocean Group | Oceanpal vs. Star Bulk Carriers | Oceanpal vs. TOP Ships |
| Star Bulk vs. Genco Shipping Trading | Star Bulk vs. Diana Shipping | Star Bulk vs. Danaos | Star Bulk vs. Golden Ocean Group |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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