Correlation Between Pangaea Logistic and Euroseas
Can any of the company-specific risk be diversified away by investing in both Pangaea Logistic and Euroseas 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 Pangaea Logistic and Euroseas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pangaea Logistic and Euroseas, you can compare the effects of market volatilities on Pangaea Logistic and Euroseas 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 Pangaea Logistic with a short position of Euroseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pangaea Logistic and Euroseas.
Diversification Opportunities for Pangaea Logistic and Euroseas
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pangaea and Euroseas is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Pangaea Logistic and Euroseas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euroseas and Pangaea Logistic 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 Pangaea Logistic are associated (or correlated) with Euroseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euroseas has no effect on the direction of Pangaea Logistic i.e., Pangaea Logistic and Euroseas go up and down completely randomly.
Pair Corralation between Pangaea Logistic and Euroseas
Given the investment horizon of 90 days Pangaea Logistic is expected to under-perform the Euroseas. But the stock apears to be less risky and, when comparing its historical volatility, Pangaea Logistic is 1.27 times less risky than Euroseas. The stock trades about -0.09 of its potential returns per unit of risk. The Euroseas is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 4,467 in Euroseas on August 28, 2024 and sell it today you would lose (394.00) from holding Euroseas or give up 8.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pangaea Logistic vs. Euroseas
Performance |
| Timeline |
| Pangaea Logistic |
| Euroseas |
Pangaea Logistic and Euroseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pangaea Logistic and Euroseas
The main advantage of trading using opposite Pangaea Logistic and Euroseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pangaea Logistic position performs unexpectedly, Euroseas 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 Euroseas will offset losses from the drop in Euroseas' long position.| Pangaea Logistic vs. EuroDry | Pangaea Logistic vs. Costamare | Pangaea Logistic vs. Global Ship Lease | Pangaea Logistic vs. Danaos |
| Euroseas vs. Star Bulk Carriers | Euroseas vs. TOP Ships | Euroseas vs. Seanergy Maritime Holdings | Euroseas vs. Performance Shipping |
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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