Correlation Between Costamare and Matson

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

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

Diversification Opportunities for Costamare and Matson

0.23

Correlation Coefficient

Costamare  Matson

Modest diversification

The 3 months correlation between Costamare and Matson is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Costamare and Matson Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matson Inc and Costamare 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 Costamare are associated (or correlated) with Matson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matson Inc has no effect on the direction of Costamare i.e., Costamare and Matson go up and down completely randomly.

Pair Corralation between Costamare and Matson

Given the investment horizon of 90 days Costamare is expected to under-perform the Matson. In addition to that, Costamare is 1.19 times more volatile than Matson Inc. It trades about -0.18 of its total potential returns per unit of risk. Matson Inc is currently generating about -0.05 per unit of volatility. If you would invest  13,523  in Matson Inc on December 29, 2024 and sell it today you would lose (817.00) from holding Matson Inc or give up 6.04% of portfolio value over 90 days.

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

Costamare  vs.  Matson Inc

Costamare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Costamare 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 rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Matson Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Matson Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Matson is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Costamare and Matson

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

The idea behind Costamare and Matson Inc 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.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.