Correlation Between DHT Holdings and United Maritime
Can any of the company-specific risk be diversified away by investing in both DHT Holdings and United Maritime 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 DHT Holdings and United Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DHT Holdings and United Maritime, you can compare the effects of market volatilities on DHT Holdings and United Maritime 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 DHT Holdings with a short position of United Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of DHT Holdings and United Maritime.
Diversification Opportunities for DHT Holdings and United Maritime
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DHT and United is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding DHT Holdings and United Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Maritime and DHT Holdings 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 DHT Holdings are associated (or correlated) with United Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Maritime has no effect on the direction of DHT Holdings i.e., DHT Holdings and United Maritime go up and down completely randomly.
Pair Corralation between DHT Holdings and United Maritime
Considering the 90-day investment horizon DHT Holdings is expected to generate 1.27 times more return on investment than United Maritime. However, DHT Holdings is 1.27 times more volatile than United Maritime. It trades about -0.06 of its potential returns per unit of risk. United Maritime is currently generating about -0.12 per unit of risk. If you would invest 1,128 in DHT Holdings on September 25, 2024 and sell it today you would lose (184.00) from holding DHT Holdings or give up 16.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
DHT Holdings vs. United Maritime
Performance |
Timeline |
DHT Holdings |
United Maritime |
DHT Holdings and United Maritime Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DHT Holdings and United Maritime
The main advantage of trading using opposite DHT Holdings and United Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DHT Holdings position performs unexpectedly, United Maritime 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 United Maritime will offset losses from the drop in United Maritime's long position.DHT Holdings vs. United Maritime | DHT Holdings vs. Globus Maritime | DHT Holdings vs. Castor Maritime | DHT Holdings vs. Safe Bulkers |
United Maritime vs. TOP Ships | United Maritime vs. Globus Maritime | United Maritime vs. Castor Maritime | United Maritime vs. Safe Bulkers |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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