Correlation Between Costamare and Pangaea Logistic

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

By analyzing existing cross correlation between Costamare and Pangaea Logistic, you can compare the effects of market volatilities on Costamare and Pangaea Logistic 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 Pangaea Logistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Costamare and Pangaea Logistic.

Diversification Opportunities for Costamare and Pangaea Logistic

0.33

Correlation Coefficient

Costamare  Pangaea Logistic

Weak diversification

The 3 months correlation between Costamare and Pangaea is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Costamare and Pangaea Logistic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pangaea Logistic 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 Pangaea Logistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pangaea Logistic has no effect on the direction of Costamare i.e., Costamare and Pangaea Logistic go up and down completely randomly.

Pair Corralation between Costamare and Pangaea Logistic

Given the investment horizon of 90 days Costamare is expected to under-perform the Pangaea Logistic. But the stock apears to be less risky and, when comparing its historical volatility, Costamare is 1.26 times less risky than Pangaea Logistic. The stock trades about -0.18 of its potential returns per unit of risk. The Pangaea Logistic is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  520.00  in Pangaea Logistic on December 30, 2024 and sell it today you would lose (34.00) from holding Pangaea Logistic or give up 6.54% 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.  Pangaea Logistic

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.

Pangaea Logistic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pangaea Logistic has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Pangaea Logistic is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Costamare and Pangaea Logistic

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

The idea behind Costamare and Pangaea Logistic 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.