Correlation Between Eagle Bulk and Costamare

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

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

Diversification Opportunities for Eagle Bulk and Costamare

0.0

Correlation Coefficient

Eagle Bulk  Costamare

Pay attention - limited upside

The 3 months correlation between Eagle and Costamare is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bulk Shipping and Costamare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costamare and Eagle Bulk 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 Eagle Bulk Shipping are associated (or correlated) with Costamare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costamare has no effect on the direction of Eagle Bulk i.e., Eagle Bulk and Costamare go up and down completely randomly.

Pair Corralation between Eagle Bulk and Costamare

If you would invest (100.00) in Eagle Bulk Shipping on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Eagle Bulk Shipping or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Eagle Bulk Shipping  vs.  Costamare

Eagle Bulk Shipping

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eagle Bulk Shipping has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Eagle Bulk is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Costamare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Costamare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Eagle Bulk and Costamare

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

The idea behind Eagle Bulk Shipping and Costamare 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.