Correlation Between Okeanis Eco and Castor Maritime

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

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

Diversification Opportunities for Okeanis Eco and Castor Maritime

-0.04

Correlation Coefficient

Okeanis Eco  Castor Maritime

Good diversification

The 3 months correlation between Okeanis and Castor is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Okeanis Eco Tankers and Castor Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castor Maritime and Okeanis Eco 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 Okeanis Eco Tankers are associated (or correlated) with Castor Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castor Maritime has no effect on the direction of Okeanis Eco i.e., Okeanis Eco and Castor Maritime go up and down completely randomly.

Pair Corralation between Okeanis Eco and Castor Maritime

Considering the 90-day investment horizon Okeanis Eco Tankers is expected to generate 1.18 times more return on investment than Castor Maritime. However, Okeanis Eco is 1.18 times more volatile than Castor Maritime. It trades about 0.07 of its potential returns per unit of risk. Castor Maritime is currently generating about -0.07 per unit of risk. If you would invest  2,035  in Okeanis Eco Tankers on December 28, 2024 and sell it today you would earn a total of  227.00  from holding Okeanis Eco Tankers or generate 11.15% return on investment over 90 days.

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

Okeanis Eco Tankers  vs.  Castor Maritime

Okeanis Eco Tankers

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Okeanis Eco Tankers are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Okeanis Eco displayed solid returns over the last few months and may actually be approaching a breakup point.

Castor Maritime

Risk-Adjusted Performance

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 latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Okeanis Eco and Castor Maritime

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

The idea behind Okeanis Eco Tankers and Castor Maritime 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.