Correlation Between Cadeler As and Belships

Can any of the company-specific risk be diversified away by investing in both Cadeler As and Belships 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 Cadeler As and Belships into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cadeler As and Belships, you can compare the effects of market volatilities on Cadeler As and Belships 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 Cadeler As with a short position of Belships. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadeler As and Belships.

Diversification Opportunities for Cadeler As and Belships

0.19

Correlation Coefficient

Cadeler As  Belships

Average diversification

The 3 months correlation between Cadeler and Belships is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Cadeler As and Belships in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belships and Cadeler As 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 Cadeler As are associated (or correlated) with Belships. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belships has no effect on the direction of Cadeler As i.e., Cadeler As and Belships go up and down completely randomly.

Pair Corralation between Cadeler As and Belships

Assuming the 90 days trading horizon Cadeler As is expected to under-perform the Belships. But the stock apears to be less risky and, when comparing its historical volatility, Cadeler As is 2.16 times less risky than Belships. The stock trades about -0.02 of its potential returns per unit of risk. The Belships is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,077  in Belships on October 10, 2024 and sell it today you would lose (57.00) from holding Belships or give up 2.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cadeler As  vs.  Belships

Cadeler As

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cadeler As has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Belships

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Belships are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Belships may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cadeler As and Belships

The main advantage of trading using opposite Cadeler As and Belships positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadeler As position performs unexpectedly, Belships 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 Belships will offset losses from the drop in Belships' long position.

The idea behind Cadeler As and Belships 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.