Correlation Between Globus Maritime and EuroDry
Can any of the company-specific risk be diversified away by investing in both Globus Maritime and EuroDry 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 Globus Maritime and EuroDry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globus Maritime and EuroDry, you can compare the effects of market volatilities on Globus Maritime and EuroDry 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 Globus Maritime with a short position of EuroDry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globus Maritime and EuroDry.
Diversification Opportunities for Globus Maritime and EuroDry
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Globus and EuroDry is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Globus Maritime and EuroDry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EuroDry and Globus 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 Globus Maritime are associated (or correlated) with EuroDry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EuroDry has no effect on the direction of Globus Maritime i.e., Globus Maritime and EuroDry go up and down completely randomly.
Pair Corralation between Globus Maritime and EuroDry
Given the investment horizon of 90 days Globus Maritime is expected to under-perform the EuroDry. In addition to that, Globus Maritime is 1.3 times more volatile than EuroDry. It trades about -0.33 of its total potential returns per unit of risk. EuroDry is currently generating about -0.19 per unit of volatility. If you would invest 2,200 in EuroDry on January 25, 2024 and sell it today you would lose (127.00) from holding EuroDry or give up 5.77% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Globus Maritime vs. EuroDry
Performance |
Timeline |
Globus Maritime |
EuroDry |
Globus Maritime and EuroDry Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Globus Maritime and EuroDry
The main advantage of trading using opposite Globus Maritime and EuroDry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globus Maritime position performs unexpectedly, EuroDry 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 EuroDry will offset losses from the drop in EuroDry's long position.The idea behind Globus Maritime and EuroDry pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Stocks Directory Find actively traded stocks across global markets | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |