Correlation Between Performance Shipping and Star Bulk
Can any of the company-specific risk be diversified away by investing in both Performance Shipping 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 Performance Shipping and Star Bulk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Performance Shipping and Star Bulk Carriers, you can compare the effects of market volatilities on Performance Shipping 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 Performance Shipping with a short position of Star Bulk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Shipping and Star Bulk.
Diversification Opportunities for Performance Shipping and Star Bulk
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Performance and Star is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Performance Shipping 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 Performance Shipping 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 Performance Shipping 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 Performance Shipping i.e., Performance Shipping and Star Bulk go up and down completely randomly.
Pair Corralation between Performance Shipping and Star Bulk
Given the investment horizon of 90 days Performance Shipping is expected to generate 1.4 times more return on investment than Star Bulk. However, Performance Shipping is 1.4 times more volatile than Star Bulk Carriers. It trades about 0.0 of its potential returns per unit of risk. Star Bulk Carriers is currently generating about -0.04 per unit of risk. If you would invest 187.00 in Performance Shipping on August 27, 2024 and sell it today you would lose (7.00) from holding Performance Shipping or give up 3.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performance Shipping vs. Star Bulk Carriers
Performance |
| Timeline |
| Performance Shipping |
| Star Bulk Carriers |
Performance Shipping and Star Bulk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Shipping and Star Bulk
The main advantage of trading using opposite Performance Shipping and Star Bulk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Shipping 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.| Performance Shipping vs. Genco Shipping Trading | Performance Shipping vs. Golden Ocean Group | Performance Shipping vs. Star Bulk Carriers | Performance Shipping vs. Oceanpal |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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