Correlation Between Safe Bulkers and TOP Ships
Can any of the company-specific risk be diversified away by investing in both Safe Bulkers and TOP Ships 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 TOP Ships into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safe Bulkers and TOP Ships, you can compare the effects of market volatilities on Safe Bulkers and TOP Ships 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 TOP Ships. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe Bulkers and TOP Ships.
Diversification Opportunities for Safe Bulkers and TOP Ships
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Safe and TOP is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Safe Bulkers and TOP Ships in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOP Ships 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 TOP Ships. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOP Ships has no effect on the direction of Safe Bulkers i.e., Safe Bulkers and TOP Ships go up and down completely randomly.
Pair Corralation between Safe Bulkers and TOP Ships
Assuming the 90 days horizon Safe Bulkers is expected to generate 0.21 times more return on investment than TOP Ships. However, Safe Bulkers is 4.83 times less risky than TOP Ships. It trades about 0.06 of its potential returns per unit of risk. TOP Ships is currently generating about -0.18 per unit of risk. If you would invest 2,490 in Safe Bulkers on September 2, 2024 and sell it today you would earn a total of 88.00 from holding Safe Bulkers or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Safe Bulkers vs. TOP Ships
Performance |
| Timeline |
| Safe Bulkers |
| TOP Ships |
Safe Bulkers and TOP Ships Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safe Bulkers and TOP Ships
The main advantage of trading using opposite Safe Bulkers and TOP Ships positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe Bulkers position performs unexpectedly, TOP Ships 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 TOP Ships will offset losses from the drop in TOP Ships' long position.| Safe Bulkers vs. Safe Bulkers | Safe Bulkers vs. Global Ship Lease | Safe Bulkers vs. Diana Shipping | Safe Bulkers vs. Costamare |
| TOP Ships vs. United Maritime | TOP Ships vs. Globus Maritime | TOP Ships vs. Castor Maritime | TOP Ships 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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