Correlation Between Performance Shipping and United Maritime
Can any of the company-specific risk be diversified away by investing in both Performance Shipping and United Maritime 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 United Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Performance Shipping and United Maritime, you can compare the effects of market volatilities on Performance Shipping and United Maritime 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 United Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Shipping and United Maritime.
Diversification Opportunities for Performance Shipping and United Maritime
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Performance and United is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Performance Shipping and United Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Maritime 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 United Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Maritime has no effect on the direction of Performance Shipping i.e., Performance Shipping and United Maritime go up and down completely randomly.
Pair Corralation between Performance Shipping and United Maritime
Given the investment horizon of 90 days Performance Shipping is expected to under-perform the United Maritime. In addition to that, Performance Shipping is 1.74 times more volatile than United Maritime. It trades about -0.19 of its total potential returns per unit of risk. United Maritime is currently generating about 0.33 per unit of volatility. If you would invest 167.00 in United Maritime on November 9, 2024 and sell it today you would earn a total of 19.00 from holding United Maritime or generate 11.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performance Shipping vs. United Maritime
Performance |
| Timeline |
| Performance Shipping |
| United Maritime |
Performance Shipping and United Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Shipping and United Maritime
The main advantage of trading using opposite Performance Shipping and United Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Shipping position performs unexpectedly, United Maritime 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 United Maritime will offset losses from the drop in United Maritime'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 |
| United Maritime vs. TOP Ships | United Maritime vs. Globus Maritime | United Maritime vs. Castor Maritime | United Maritime vs. Safe Bulkers |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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