Correlation Between Okeanis Eco and Oceanpal

Can any of the company-specific risk be diversified away by investing in both Okeanis Eco and Oceanpal 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 Oceanpal 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 Oceanpal, you can compare the effects of market volatilities on Okeanis Eco and Oceanpal 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 Oceanpal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okeanis Eco and Oceanpal.

Diversification Opportunities for Okeanis Eco and Oceanpal

0.73

Correlation Coefficient

Okeanis Eco  Oceanpal

Poor diversification

The 3 months correlation between Okeanis and Oceanpal is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Okeanis Eco Tankers and Oceanpal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oceanpal 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 Oceanpal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oceanpal has no effect on the direction of Okeanis Eco i.e., Okeanis Eco and Oceanpal go up and down completely randomly.

Pair Corralation between Okeanis Eco and Oceanpal

Considering the 90-day investment horizon Okeanis Eco Tankers is expected to under-perform the Oceanpal. In addition to that, Okeanis Eco is 1.0 times more volatile than Oceanpal. It trades about -0.3 of its total potential returns per unit of risk. Oceanpal is currently generating about -0.05 per unit of volatility. If you would invest  156.00  in Oceanpal on September 14, 2024 and sell it today you would lose (15.00) from holding Oceanpal or give up 9.62% of portfolio value over 90 days.

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

Okeanis Eco Tankers  vs.  Oceanpal

Okeanis Eco Tankers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Okeanis Eco Tankers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Oceanpal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Oceanpal has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Okeanis Eco and Oceanpal

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

The idea behind Okeanis Eco Tankers and Oceanpal 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.