Correlation Between Star Bulk and Hapag-Lloyd Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Star Bulk and Hapag-Lloyd Aktiengesellscha 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 Star Bulk and Hapag-Lloyd Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Bulk Carriers and Hapag Lloyd Aktiengesellschaft, you can compare the effects of market volatilities on Star Bulk and Hapag-Lloyd Aktiengesellscha 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 Star Bulk with a short position of Hapag-Lloyd Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Bulk and Hapag-Lloyd Aktiengesellscha.
Diversification Opportunities for Star Bulk and Hapag-Lloyd Aktiengesellscha
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Star and Hapag-Lloyd is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Star Bulk Carriers and Hapag Lloyd Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hapag-Lloyd Aktiengesellscha and Star Bulk 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 Star Bulk Carriers are associated (or correlated) with Hapag-Lloyd Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hapag-Lloyd Aktiengesellscha has no effect on the direction of Star Bulk i.e., Star Bulk and Hapag-Lloyd Aktiengesellscha go up and down completely randomly.
Pair Corralation between Star Bulk and Hapag-Lloyd Aktiengesellscha
Given the investment horizon of 90 days Star Bulk Carriers is expected to under-perform the Hapag-Lloyd Aktiengesellscha. But the stock apears to be less risky and, when comparing its historical volatility, Star Bulk Carriers is 2.18 times less risky than Hapag-Lloyd Aktiengesellscha. The stock trades about -0.34 of its potential returns per unit of risk. The Hapag Lloyd Aktiengesellschaft is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 17,445 in Hapag Lloyd Aktiengesellschaft on August 28, 2024 and sell it today you would lose (1,610) from holding Hapag Lloyd Aktiengesellschaft or give up 9.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Bulk Carriers vs. Hapag Lloyd Aktiengesellschaft
Performance |
| Timeline |
| Star Bulk Carriers |
| Hapag-Lloyd Aktiengesellscha |
Star Bulk and Hapag-Lloyd Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Bulk and Hapag-Lloyd Aktiengesellscha
The main advantage of trading using opposite Star Bulk and Hapag-Lloyd Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Bulk position performs unexpectedly, Hapag-Lloyd Aktiengesellscha 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 Hapag-Lloyd Aktiengesellscha will offset losses from the drop in Hapag-Lloyd Aktiengesellscha's long position.| Star Bulk vs. Genco Shipping Trading | Star Bulk vs. Diana Shipping | Star Bulk vs. Danaos | Star Bulk vs. Golden Ocean Group |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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