Correlation Between Castor Maritime and ONEOK

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

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

Diversification Opportunities for Castor Maritime and ONEOK

-0.47

Correlation Coefficient

Castor Maritime  ONEOK

Very good diversification

The 3 months correlation between Castor and ONEOK is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Castor Maritime and ONEOK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK Inc 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 ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK Inc has no effect on the direction of Castor Maritime i.e., Castor Maritime and ONEOK go up and down completely randomly.

Pair Corralation between Castor Maritime and ONEOK

Given the investment horizon of 90 days Castor Maritime is expected to under-perform the ONEOK. In addition to that, Castor Maritime is 2.35 times more volatile than ONEOK Inc. It trades about -0.3 of its total potential returns per unit of risk. ONEOK Inc is currently generating about -0.3 per unit of volatility. If you would invest  11,044  in ONEOK Inc on October 3, 2024 and sell it today you would lose (1,004) from holding ONEOK Inc or give up 9.09% of portfolio value over 90 days.

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

Castor Maritime  vs.  ONEOK Inc

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.

ONEOK Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ONEOK Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward-looking signals, ONEOK may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Castor Maritime and ONEOK

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

The idea behind Castor Maritime and ONEOK 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.