Correlation Between United Maritime and Euroseas
Can any of the company-specific risk be diversified away by investing in both United Maritime and Euroseas 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 Euroseas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Maritime and Euroseas, you can compare the effects of market volatilities on United Maritime and Euroseas 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 Euroseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Maritime and Euroseas.
Diversification Opportunities for United Maritime and Euroseas
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Euroseas is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding United Maritime and Euroseas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euroseas 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 Euroseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euroseas has no effect on the direction of United Maritime i.e., United Maritime and Euroseas go up and down completely randomly.
Pair Corralation between United Maritime and Euroseas
Given the investment horizon of 90 days United Maritime is expected to under-perform the Euroseas. In addition to that, United Maritime is 1.07 times more volatile than Euroseas. It trades about -0.28 of its total potential returns per unit of risk. Euroseas is currently generating about -0.1 per unit of volatility. If you would invest 4,110 in Euroseas on August 30, 2024 and sell it today you would lose (243.00) from holding Euroseas or give up 5.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Maritime vs. Euroseas
Performance |
| Timeline |
| United Maritime |
| Euroseas |
United Maritime and Euroseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Maritime and Euroseas
The main advantage of trading using opposite United Maritime and Euroseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Maritime position performs unexpectedly, Euroseas 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 Euroseas will offset losses from the drop in Euroseas' long position.| United Maritime vs. TOP Ships | United Maritime vs. Globus Maritime | United Maritime vs. Castor Maritime | United Maritime vs. Safe Bulkers |
| Euroseas vs. Pyxis Tankers | Euroseas vs. Pacific Basin Shipping | Euroseas vs. dAmico International Shipping | Euroseas vs. Danaos |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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