Correlation Between Safe Bulkers and Himalaya Shipping
Can any of the company-specific risk be diversified away by investing in both Safe Bulkers and Himalaya Shipping 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 Himalaya Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safe Bulkers and Himalaya Shipping, you can compare the effects of market volatilities on Safe Bulkers and Himalaya Shipping 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 Himalaya Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe Bulkers and Himalaya Shipping.
Diversification Opportunities for Safe Bulkers and Himalaya Shipping
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Safe and Himalaya is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Safe Bulkers and Himalaya Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Himalaya Shipping 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 Himalaya Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Himalaya Shipping has no effect on the direction of Safe Bulkers i.e., Safe Bulkers and Himalaya Shipping go up and down completely randomly.
Pair Corralation between Safe Bulkers and Himalaya Shipping
Allowing for the 90-day total investment horizon Safe Bulkers is expected to generate 1.15 times less return on investment than Himalaya Shipping. But when comparing it to its historical volatility, Safe Bulkers is 1.39 times less risky than Himalaya Shipping. It trades about 0.06 of its potential returns per unit of risk. Himalaya Shipping is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 466.00 in Himalaya Shipping on August 27, 2024 and sell it today you would earn a total of 226.00 from holding Himalaya Shipping or generate 48.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 84.27% |
| Values | Daily Returns |
Safe Bulkers vs. Himalaya Shipping
Performance |
| Timeline |
| Safe Bulkers |
| Himalaya Shipping |
Safe Bulkers and Himalaya Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safe Bulkers and Himalaya Shipping
The main advantage of trading using opposite Safe Bulkers and Himalaya Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe Bulkers position performs unexpectedly, Himalaya Shipping 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 Himalaya Shipping will offset losses from the drop in Himalaya Shipping's long position.| Safe Bulkers vs. Star Bulk Carriers | Safe Bulkers vs. TOP Ships | Safe Bulkers vs. Seanergy Maritime Holdings | Safe Bulkers vs. Performance Shipping |
| Himalaya Shipping vs. Solstad Offshore ASA | Himalaya Shipping vs. MYR Group | Himalaya Shipping vs. Chester Mining | Himalaya Shipping vs. Park Ohio Holdings |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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