Correlation Between United Maritime and Safe Bulkers
Can any of the company-specific risk be diversified away by investing in both United Maritime and Safe Bulkers 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 Safe Bulkers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Maritime and Safe Bulkers, you can compare the effects of market volatilities on United Maritime and Safe Bulkers 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 Safe Bulkers. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Maritime and Safe Bulkers.
Diversification Opportunities for United Maritime and Safe Bulkers
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Safe is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding United Maritime and Safe Bulkers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe Bulkers 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 Safe Bulkers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe Bulkers has no effect on the direction of United Maritime i.e., United Maritime and Safe Bulkers go up and down completely randomly.
Pair Corralation between United Maritime and Safe Bulkers
Given the investment horizon of 90 days United Maritime is expected to generate 0.69 times more return on investment than Safe Bulkers. However, United Maritime is 1.46 times less risky than Safe Bulkers. It trades about 0.33 of its potential returns per unit of risk. Safe Bulkers is currently generating about 0.1 per unit of risk. If you would invest 167.00 in United Maritime on November 9, 2024 and sell it today you would earn a total of 19.00 from holding United Maritime or generate 11.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Maritime vs. Safe Bulkers
Performance |
| Timeline |
| United Maritime |
| Safe Bulkers |
United Maritime and Safe Bulkers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Maritime and Safe Bulkers
The main advantage of trading using opposite United Maritime and Safe Bulkers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Maritime position performs unexpectedly, Safe Bulkers 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 Safe Bulkers will offset losses from the drop in Safe Bulkers' long position.| United Maritime vs. TOP Ships | United Maritime vs. Globus Maritime | United Maritime vs. Castor Maritime | United Maritime vs. Safe Bulkers |
| Safe Bulkers vs. Global Ship Lease | Safe Bulkers vs. Costamare | Safe Bulkers vs. Navios Maritime Partners | Safe Bulkers vs. Genco Shipping Trading |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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