Correlation Between Safe Bulkers and Caravelle International
Can any of the company-specific risk be diversified away by investing in both Safe Bulkers and Caravelle International 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 Caravelle International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safe Bulkers and Caravelle International Group, you can compare the effects of market volatilities on Safe Bulkers and Caravelle International 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 Caravelle International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe Bulkers and Caravelle International.
Diversification Opportunities for Safe Bulkers and Caravelle International
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Safe and Caravelle is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Safe Bulkers and Caravelle International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caravelle International 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 Caravelle International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caravelle International has no effect on the direction of Safe Bulkers i.e., Safe Bulkers and Caravelle International go up and down completely randomly.
Pair Corralation between Safe Bulkers and Caravelle International
Assuming the 90 days horizon Safe Bulkers is expected to under-perform the Caravelle International. But the preferred stock apears to be less risky and, when comparing its historical volatility, Safe Bulkers is 11.38 times less risky than Caravelle International. The preferred stock trades about -0.03 of its potential returns per unit of risk. The Caravelle International Group is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 101.00 in Caravelle International Group on August 27, 2024 and sell it today you would earn a total of 30.00 from holding Caravelle International Group or generate 29.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safe Bulkers vs. Caravelle International Group
Performance |
| Timeline |
| Safe Bulkers |
| Caravelle International |
Safe Bulkers and Caravelle International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safe Bulkers and Caravelle International
The main advantage of trading using opposite Safe Bulkers and Caravelle International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe Bulkers position performs unexpectedly, Caravelle International 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 Caravelle International will offset losses from the drop in Caravelle International's long position.| Safe Bulkers vs. Safe Bulkers | Safe Bulkers vs. Global Ship Lease | Safe Bulkers vs. Diana Shipping | Safe Bulkers vs. Costamare |
| Caravelle International vs. Oceanpal | Caravelle International vs. Safe Bulkers | Caravelle International vs. Safe Bulkers | Caravelle International 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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