Correlation Between Safe Bulkers and Block
Can any of the company-specific risk be diversified away by investing in both Safe Bulkers and Block 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 Block into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safe Bulkers and Block Inc, you can compare the effects of market volatilities on Safe Bulkers and Block 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 Block. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe Bulkers and Block.
Diversification Opportunities for Safe Bulkers and Block
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Safe and Block is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Safe Bulkers and Block Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Block Inc 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 Block. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Block Inc has no effect on the direction of Safe Bulkers i.e., Safe Bulkers and Block go up and down completely randomly.
Pair Corralation between Safe Bulkers and Block
Allowing for the 90-day total investment horizon Safe Bulkers is expected to generate 0.67 times more return on investment than Block. However, Safe Bulkers is 1.48 times less risky than Block. It trades about 0.06 of its potential returns per unit of risk. Block Inc is currently generating about 0.03 per unit of risk. If you would invest 250.00 in Safe Bulkers on August 23, 2024 and sell it today you would earn a total of 173.00 from holding Safe Bulkers or generate 69.2% 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. Block Inc
Performance |
| Timeline |
| Safe Bulkers |
| Block Inc |
Safe Bulkers and Block Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safe Bulkers and Block
The main advantage of trading using opposite Safe Bulkers and Block positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe Bulkers position performs unexpectedly, Block 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 Block will offset losses from the drop in Block'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 |
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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