Correlation Between Safe Bulkers and Western Bulk
Can any of the company-specific risk be diversified away by investing in both Safe Bulkers and Western Bulk 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 Western Bulk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safe Bulkers and Western Bulk Chartering, you can compare the effects of market volatilities on Safe Bulkers and Western Bulk 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 Western Bulk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe Bulkers and Western Bulk.
Diversification Opportunities for Safe Bulkers and Western Bulk
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Safe and Western is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Safe Bulkers and Western Bulk Chartering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Bulk Chartering 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 Western Bulk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Bulk Chartering has no effect on the direction of Safe Bulkers i.e., Safe Bulkers and Western Bulk go up and down completely randomly.
Pair Corralation between Safe Bulkers and Western Bulk
Assuming the 90 days horizon Safe Bulkers is expected to generate 0.11 times more return on investment than Western Bulk. However, Safe Bulkers is 9.29 times less risky than Western Bulk. It trades about 0.0 of its potential returns per unit of risk. Western Bulk Chartering is currently generating about -0.26 per unit of risk. If you would invest 2,580 in Safe Bulkers on September 2, 2024 and sell it today you would lose (2.00) from holding Safe Bulkers or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Safe Bulkers vs. Western Bulk Chartering
Performance |
| Timeline |
| Safe Bulkers |
| Western Bulk Chartering |
Safe Bulkers and Western Bulk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safe Bulkers and Western Bulk
The main advantage of trading using opposite Safe Bulkers and Western Bulk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe Bulkers position performs unexpectedly, Western Bulk 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 Western Bulk will offset losses from the drop in Western Bulk's long position.| Safe Bulkers vs. Safe Bulkers | Safe Bulkers vs. Global Ship Lease | Safe Bulkers vs. Diana Shipping | Safe Bulkers vs. Costamare |
| Western Bulk vs. AP Mller | Western Bulk vs. COSCO SHIPPING Holdings | Western Bulk vs. Orient Overseas Limited |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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