Correlation Between Castor Maritime and DAmico International

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

By analyzing existing cross correlation between Castor Maritime and dAmico International Shipping, you can compare the effects of market volatilities on Castor Maritime and DAmico International 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 Castor Maritime with a short position of DAmico International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castor Maritime and DAmico International.

Diversification Opportunities for Castor Maritime and DAmico International

0.64

Correlation Coefficient

Castor Maritime  DAmico International

Poor diversification

The 3 months correlation between Castor and DAmico is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Castor Maritime and dAmico International Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on dAmico International and Castor 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 Castor Maritime are associated (or correlated) with DAmico International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of dAmico International has no effect on the direction of Castor Maritime i.e., Castor Maritime and DAmico International go up and down completely randomly.

Pair Corralation between Castor Maritime and DAmico International

Given the investment horizon of 90 days Castor Maritime is expected to generate 8.63 times less return on investment than DAmico International. In addition to that, Castor Maritime is 1.45 times more volatile than dAmico International Shipping. It trades about 0.0 of its total potential returns per unit of risk. dAmico International Shipping is currently generating about 0.03 per unit of volatility. If you would invest  340.00  in dAmico International Shipping on October 15, 2024 and sell it today you would earn a total of  110.00  from holding dAmico International Shipping or generate 32.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.6%
Values	Daily Returns

Castor Maritime  vs.  dAmico International Shipping

Castor Maritime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Castor Maritime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

dAmico International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days dAmico International Shipping has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Castor Maritime and DAmico International

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

The idea behind Castor Maritime and dAmico International Shipping 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.