Correlation Between Kirby and Diana Shipping
Can any of the company-specific risk be diversified away by investing in both Kirby and Diana Shipping 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 Kirby and Diana Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kirby and Diana Shipping inc, you can compare the effects of market volatilities on Kirby and Diana Shipping 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 Kirby with a short position of Diana Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kirby and Diana Shipping.
Diversification Opportunities for Kirby and Diana Shipping
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kirby and Diana is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Kirby and Diana Shipping inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diana Shipping inc and Kirby 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 Kirby are associated (or correlated) with Diana Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diana Shipping inc has no effect on the direction of Kirby i.e., Kirby and Diana Shipping go up and down completely randomly.
Pair Corralation between Kirby and Diana Shipping
Considering the 90-day investment horizon Kirby is expected to generate 1.3 times more return on investment than Diana Shipping. However, Kirby is 1.3 times more volatile than Diana Shipping inc. It trades about 0.33 of its potential returns per unit of risk. Diana Shipping inc is currently generating about 0.07 per unit of risk. If you would invest 9,247 in Kirby on January 25, 2024 and sell it today you would earn a total of 947.00 from holding Kirby or generate 10.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kirby vs. Diana Shipping inc
Performance |
Timeline |
Kirby |
Diana Shipping inc |
Kirby and Diana Shipping Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kirby and Diana Shipping
The main advantage of trading using opposite Kirby and Diana Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kirby position performs unexpectedly, Diana Shipping 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 Diana Shipping will offset losses from the drop in Diana Shipping's long position.Kirby vs. Global Ship Lease | Kirby vs. Navios Maritime Partners | Kirby vs. United Maritime | Kirby vs. Top Ships |
Diana Shipping vs. Global Ship Lease | Diana Shipping vs. Navios Maritime Partners | Diana Shipping vs. United Maritime | Diana Shipping vs. Top Ships |
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 Correlations module to find global opportunities by holding instruments from different markets.
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