Correlation Between Safe Bulkers and Fastenal
Can any of the company-specific risk be diversified away by investing in both Safe Bulkers and Fastenal 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 Fastenal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safe Bulkers and Fastenal Company, you can compare the effects of market volatilities on Safe Bulkers and Fastenal 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 Fastenal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe Bulkers and Fastenal.
Diversification Opportunities for Safe Bulkers and Fastenal
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Safe and Fastenal is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Safe Bulkers and Fastenal Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastenal 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 Fastenal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastenal has no effect on the direction of Safe Bulkers i.e., Safe Bulkers and Fastenal go up and down completely randomly.
Pair Corralation between Safe Bulkers and Fastenal
Allowing for the 90-day total investment horizon Safe Bulkers is expected to under-perform the Fastenal. But the stock apears to be less risky and, when comparing its historical volatility, Safe Bulkers is 1.08 times less risky than Fastenal. The stock trades about -0.24 of its potential returns per unit of risk. The Fastenal Company is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 7,035 in Fastenal Company on August 26, 2024 and sell it today you would earn a total of 1,273 from holding Fastenal Company or generate 18.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safe Bulkers vs. Fastenal Company
Performance |
| Timeline |
| Safe Bulkers |
| Fastenal |
Safe Bulkers and Fastenal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safe Bulkers and Fastenal
The main advantage of trading using opposite Safe Bulkers and Fastenal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe Bulkers position performs unexpectedly, Fastenal 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 Fastenal will offset losses from the drop in Fastenal's long position.| Safe Bulkers vs. Global Ship Lease | Safe Bulkers vs. Costamare | Safe Bulkers vs. Navios Maritime Partners | Safe Bulkers vs. Genco Shipping Trading |
| Fastenal vs. Applied Industrial Technologies | Fastenal vs. MSC Industrial Direct | Fastenal vs. Ferguson Plc | Fastenal vs. Watsco Inc |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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