Correlation Between DAmico International and Performance Shipping

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

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

Diversification Opportunities for DAmico International and Performance Shipping

0.45

Correlation Coefficient

DAmico International  Performance Shipping

Very weak diversification

The 3 months correlation between DAmico and Performance is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding dAmico International Shipping and Performance Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Shipping and DAmico International 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 dAmico International Shipping are associated (or correlated) with Performance Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Shipping has no effect on the direction of DAmico International i.e., DAmico International and Performance Shipping go up and down completely randomly.

Pair Corralation between DAmico International and Performance Shipping

Assuming the 90 days horizon dAmico International Shipping is expected to under-perform the Performance Shipping. But the otc stock apears to be less risky and, when comparing its historical volatility, dAmico International Shipping is 1.15 times less risky than Performance Shipping. The otc stock trades about -0.04 of its potential returns per unit of risk. The Performance Shipping is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  178.00  in Performance Shipping on October 2, 2024 and sell it today you would earn a total of  8.00  from holding Performance Shipping or generate 4.49% return on investment over 90 days.

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

dAmico International Shipping  vs.  Performance Shipping

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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Performance Shipping

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Performance Shipping are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, Performance Shipping is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with DAmico International and Performance Shipping

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

The idea behind dAmico International Shipping and Performance 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.