Correlation Between Himalaya Shipping and Costamare
Can any of the company-specific risk be diversified away by investing in both Himalaya Shipping and Costamare 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 Himalaya Shipping and Costamare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Himalaya Shipping and Costamare, you can compare the effects of market volatilities on Himalaya Shipping and Costamare 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 Himalaya Shipping with a short position of Costamare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Himalaya Shipping and Costamare.
Diversification Opportunities for Himalaya Shipping and Costamare
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Himalaya and Costamare is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Himalaya Shipping and Costamare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costamare and Himalaya Shipping 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 Himalaya Shipping are associated (or correlated) with Costamare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costamare has no effect on the direction of Himalaya Shipping i.e., Himalaya Shipping and Costamare go up and down completely randomly.
Pair Corralation between Himalaya Shipping and Costamare
Given the investment horizon of 90 days Himalaya Shipping is expected to generate 3.92 times less return on investment than Costamare. In addition to that, Himalaya Shipping is 1.65 times more volatile than Costamare. It trades about 0.04 of its total potential returns per unit of risk. Costamare is currently generating about 0.26 per unit of volatility. If you would invest 1,122 in Costamare on February 23, 2024 and sell it today you would earn a total of 351.00 from holding Costamare or generate 31.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Himalaya Shipping vs. Costamare
Performance |
Timeline |
Himalaya Shipping |
Costamare |
Himalaya Shipping and Costamare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Himalaya Shipping and Costamare
The main advantage of trading using opposite Himalaya Shipping and Costamare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Himalaya Shipping position performs unexpectedly, Costamare 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 Costamare will offset losses from the drop in Costamare's long position.Himalaya Shipping vs. MACOM Technology Solutions | Himalaya Shipping vs. Micron Technology | Himalaya Shipping vs. Vita Coco | Himalaya Shipping vs. Microchip Technology |
Costamare vs. Global Ship Lease | Costamare vs. Navios Maritime Partners | Costamare vs. Genco Shipping Trading | Costamare 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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