Correlation Between Safe Bulkers and Nippon Yusen
Can any of the company-specific risk be diversified away by investing in both Safe Bulkers and Nippon Yusen 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 Nippon Yusen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safe Bulkers and Nippon Yusen Kabushiki, you can compare the effects of market volatilities on Safe Bulkers and Nippon Yusen 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 Nippon Yusen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe Bulkers and Nippon Yusen.
Diversification Opportunities for Safe Bulkers and Nippon Yusen
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Safe and Nippon is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Safe Bulkers and Nippon Yusen Kabushiki in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Yusen Kabushiki 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 Nippon Yusen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Yusen Kabushiki has no effect on the direction of Safe Bulkers i.e., Safe Bulkers and Nippon Yusen go up and down completely randomly.
Pair Corralation between Safe Bulkers and Nippon Yusen
Allowing for the 90-day total investment horizon Safe Bulkers is expected to generate 0.95 times more return on investment than Nippon Yusen. However, Safe Bulkers is 1.05 times less risky than Nippon Yusen. It trades about 0.05 of its potential returns per unit of risk. Nippon Yusen Kabushiki is currently generating about 0.04 per unit of risk. If you would invest 254.00 in Safe Bulkers on September 3, 2024 and sell it today you would earn a total of 133.00 from holding Safe Bulkers or generate 52.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safe Bulkers vs. Nippon Yusen Kabushiki
Performance |
| Timeline |
| Safe Bulkers |
| Nippon Yusen Kabushiki |
Safe Bulkers and Nippon Yusen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safe Bulkers and Nippon Yusen
The main advantage of trading using opposite Safe Bulkers and Nippon Yusen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe Bulkers position performs unexpectedly, Nippon Yusen 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 Nippon Yusen will offset losses from the drop in Nippon Yusen's long position.| Safe Bulkers vs. Golden Ocean Group | Safe Bulkers vs. TOP Ships | Safe Bulkers vs. Seanergy Maritime Holdings | Safe Bulkers vs. Euroseas |
| Nippon Yusen vs. Hapag Lloyd Aktiengesellschaft | Nippon Yusen vs. COSCO SHIPPING Holdings | Nippon Yusen vs. COSCO SHIPPING Holdings | Nippon Yusen 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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