Correlation Between Box Ships and SeaCo
Can any of the company-specific risk be diversified away by investing in both Box Ships and SeaCo 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 Box Ships and SeaCo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Box Ships and SeaCo, you can compare the effects of market volatilities on Box Ships and SeaCo 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 Box Ships with a short position of SeaCo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Box Ships and SeaCo.
Diversification Opportunities for Box Ships and SeaCo
No risk reduction
The 3 months correlation between Box and SeaCo is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Box Ships and SeaCo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SeaCo and Box Ships 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 Box Ships are associated (or correlated) with SeaCo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SeaCo has no effect on the direction of Box Ships i.e., Box Ships and SeaCo go up and down completely randomly.
Pair Corralation between Box Ships and SeaCo
Assuming the 90 days horizon Box Ships is expected to generate 1.15 times more return on investment than SeaCo. However, Box Ships is 1.15 times more volatile than SeaCo. It trades about 0.04 of its potential returns per unit of risk. SeaCo is currently generating about 0.04 per unit of risk. If you would invest 0.04 in Box Ships on August 27, 2024 and sell it today you would lose (0.03) from holding Box Ships or give up 75.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 77.62% |
| Values | Daily Returns |
Box Ships vs. SeaCo
Performance |
| Timeline |
| Box Ships |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SeaCo |
Box Ships and SeaCo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Box Ships and SeaCo
The main advantage of trading using opposite Box Ships and SeaCo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Box Ships position performs unexpectedly, SeaCo 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 SeaCo will offset losses from the drop in SeaCo's long position.| Box Ships vs. Usio Inc | Box Ships vs. Inter Parfums | Box Ships vs. Lincoln Electric Holdings | Box Ships vs. Paysafe |
| SeaCo vs. Brunswick | SeaCo vs. American Axle Manufacturing | SeaCo vs. Magna International | SeaCo vs. Maanshan Iron Steel |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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