Correlation Between Safe Bulkers and Diana Shipping
Can any of the company-specific risk be diversified away by investing in both Safe Bulkers and Diana Shipping 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 Safe Bulkers and Diana Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safe Bulkers and Diana Shipping, you can compare the effects of market volatilities on Safe Bulkers and Diana Shipping 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 Safe Bulkers with a short position of Diana Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe Bulkers and Diana Shipping.
Diversification Opportunities for Safe Bulkers and Diana Shipping
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Safe and Diana is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Safe Bulkers and Diana Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diana Shipping and Safe Bulkers 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 Safe Bulkers are associated (or correlated) with Diana Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diana Shipping has no effect on the direction of Safe Bulkers i.e., Safe Bulkers and Diana Shipping go up and down completely randomly.
Pair Corralation between Safe Bulkers and Diana Shipping
Assuming the 90 days horizon Safe Bulkers is expected to generate 3.41 times more return on investment than Diana Shipping. However, Safe Bulkers is 3.41 times more volatile than Diana Shipping. It trades about 0.03 of its potential returns per unit of risk. Diana Shipping is currently generating about 0.07 per unit of risk. If you would invest 2,134 in Safe Bulkers on August 27, 2024 and sell it today you would earn a total of 417.00 from holding Safe Bulkers or generate 19.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.74% |
| Values | Daily Returns |
Safe Bulkers vs. Diana Shipping
Performance |
| Timeline |
| Safe Bulkers |
| Diana Shipping |
Safe Bulkers and Diana Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safe Bulkers and Diana Shipping
The main advantage of trading using opposite Safe Bulkers and Diana Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe Bulkers position performs unexpectedly, Diana Shipping 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 Diana Shipping will offset losses from the drop in Diana Shipping's long position.| Safe Bulkers vs. Safe Bulkers | Safe Bulkers vs. Global Ship Lease | Safe Bulkers vs. Diana Shipping | Safe Bulkers vs. Costamare |
| Diana Shipping vs. Global Ship Lease | Diana Shipping vs. Safe Bulkers | Diana Shipping vs. Costamare | Diana Shipping 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |