Correlation Between TOP Ships and Castor Maritime
Can any of the company-specific risk be diversified away by investing in both TOP Ships and Castor Maritime 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 TOP Ships and Castor Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOP Ships and Castor Maritime, you can compare the effects of market volatilities on TOP Ships and Castor Maritime 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 TOP Ships with a short position of Castor Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOP Ships and Castor Maritime.
Diversification Opportunities for TOP Ships and Castor Maritime
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TOP and Castor is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding TOP Ships and Castor Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castor Maritime and TOP 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 TOP Ships are associated (or correlated) with Castor Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castor Maritime has no effect on the direction of TOP Ships i.e., TOP Ships and Castor Maritime go up and down completely randomly.
Pair Corralation between TOP Ships and Castor Maritime
Given the investment horizon of 90 days TOP Ships is expected to generate 8.55 times more return on investment than Castor Maritime. However, TOP Ships is 8.55 times more volatile than Castor Maritime. It trades about 0.04 of its potential returns per unit of risk. Castor Maritime is currently generating about 0.01 per unit of risk. If you would invest 1,452 in TOP Ships on August 28, 2024 and sell it today you would lose (672.00) from holding TOP Ships or give up 46.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
TOP Ships vs. Castor Maritime
Performance |
| Timeline |
| TOP Ships |
| Castor Maritime |
TOP Ships and Castor Maritime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOP Ships and Castor Maritime
The main advantage of trading using opposite TOP Ships and Castor Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOP Ships position performs unexpectedly, Castor Maritime 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 Castor Maritime will offset losses from the drop in Castor Maritime's long position.| TOP Ships vs. United Maritime | TOP Ships vs. Globus Maritime | TOP Ships vs. Castor Maritime | TOP Ships vs. Safe Bulkers |
| Castor Maritime vs. Seanergy Maritime Holdings | Castor Maritime vs. TOP Ships | Castor Maritime vs. United Maritime | Castor Maritime vs. Nordic American Tankers |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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