Correlation Between Safe Bulkers and Kirby
Can any of the company-specific risk be diversified away by investing in both Safe Bulkers and Kirby 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 Kirby into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safe Bulkers and Kirby, you can compare the effects of market volatilities on Safe Bulkers and Kirby 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 Kirby. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe Bulkers and Kirby.
Diversification Opportunities for Safe Bulkers and Kirby
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Safe and Kirby is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Safe Bulkers and Kirby in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kirby 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 Kirby. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kirby has no effect on the direction of Safe Bulkers i.e., Safe Bulkers and Kirby go up and down completely randomly.
Pair Corralation between Safe Bulkers and Kirby
Assuming the 90 days horizon Safe Bulkers is expected to under-perform the Kirby. But the preferred stock apears to be less risky and, when comparing its historical volatility, Safe Bulkers is 3.06 times less risky than Kirby. The preferred stock trades about 0.0 of its potential returns per unit of risk. The Kirby is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 11,428 in Kirby on September 2, 2024 and sell it today you would earn a total of 1,223 from holding Kirby or generate 10.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Safe Bulkers vs. Kirby
Performance |
| Timeline |
| Safe Bulkers |
| Kirby |
Safe Bulkers and Kirby Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safe Bulkers and Kirby
The main advantage of trading using opposite Safe Bulkers and Kirby positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe Bulkers position performs unexpectedly, Kirby 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 Kirby will offset losses from the drop in Kirby's long position.| Safe Bulkers vs. Safe Bulkers | Safe Bulkers vs. Global Ship Lease | Safe Bulkers vs. Diana Shipping | Safe Bulkers vs. Costamare |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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