Correlation Between United Maritime and Danaos
Can any of the company-specific risk be diversified away by investing in both United Maritime and Danaos 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 United Maritime and Danaos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Maritime and Danaos, you can compare the effects of market volatilities on United Maritime and Danaos 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 United Maritime with a short position of Danaos. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Maritime and Danaos.
Diversification Opportunities for United Maritime and Danaos
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Danaos is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding United Maritime and Danaos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danaos and United Maritime 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 United Maritime are associated (or correlated) with Danaos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danaos has no effect on the direction of United Maritime i.e., United Maritime and Danaos go up and down completely randomly.
Pair Corralation between United Maritime and Danaos
Given the investment horizon of 90 days United Maritime is expected to generate 1.7 times more return on investment than Danaos. However, United Maritime is 1.7 times more volatile than Danaos. It trades about 0.14 of its potential returns per unit of risk. Danaos is currently generating about 0.04 per unit of risk. If you would invest 174.00 in United Maritime on October 20, 2024 and sell it today you would earn a total of 13.00 from holding United Maritime or generate 7.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Maritime vs. Danaos
Performance |
| Timeline |
| United Maritime |
| Danaos |
United Maritime and Danaos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Maritime and Danaos
The main advantage of trading using opposite United Maritime and Danaos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Maritime position performs unexpectedly, Danaos 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 Danaos will offset losses from the drop in Danaos' long position.| United Maritime vs. TOP Ships | United Maritime vs. Globus Maritime | United Maritime vs. Castor Maritime | United Maritime vs. Safe Bulkers |
| Danaos vs. Genco Shipping Trading | Danaos vs. Costamare | Danaos vs. Ardmore Shpng | Danaos vs. Global Ship Lease |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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