Correlation Between Orient Overseas and Star Bulk
Can any of the company-specific risk be diversified away by investing in both Orient Overseas 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 Orient Overseas and Star Bulk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orient Overseas Limited and Star Bulk Carriers, you can compare the effects of market volatilities on Orient Overseas 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 Orient Overseas with a short position of Star Bulk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Overseas and Star Bulk.
Diversification Opportunities for Orient Overseas and Star Bulk
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Orient and Star is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Orient Overseas Limited 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 Orient Overseas 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 Orient Overseas Limited 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 Orient Overseas i.e., Orient Overseas and Star Bulk go up and down completely randomly.
Pair Corralation between Orient Overseas and Star Bulk
Assuming the 90 days horizon Orient Overseas Limited is expected to generate 0.23 times more return on investment than Star Bulk. However, Orient Overseas Limited is 4.43 times less risky than Star Bulk. It trades about 0.21 of its potential returns per unit of risk. Star Bulk Carriers is currently generating about -0.07 per unit of risk. If you would invest 1,370 in Orient Overseas Limited on August 25, 2024 and sell it today you would earn a total of 26.00 from holding Orient Overseas Limited or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orient Overseas Limited vs. Star Bulk Carriers
Performance |
| Timeline |
| Orient Overseas |
| Star Bulk Carriers |
Orient Overseas and Star Bulk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orient Overseas and Star Bulk
The main advantage of trading using opposite Orient Overseas and Star Bulk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Overseas 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.| Orient Overseas vs. SITC International Holdings | Orient Overseas vs. COSCO SHIPPING Holdings | Orient Overseas vs. Pacific Basin Shipping | Orient Overseas vs. Mitsui OSK Lines |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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