Correlation Between Eagle Bulk and Star Bulk

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

Diversification Opportunities for Eagle Bulk and Star Bulk

0.0

Correlation Coefficient

Eagle Bulk  Star Bulk

Pay attention - limited upside

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

Pair Corralation between Eagle Bulk and Star Bulk

If you would invest  1,461  in Star Bulk Carriers on December 28, 2024 and sell it today you would earn a total of  151.00  from holding Star Bulk Carriers or generate 10.34% 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.  Star Bulk Carriers

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 latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Star Bulk Carriers

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Star Bulk Carriers are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Star Bulk may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Eagle Bulk and Star Bulk

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

The idea behind Eagle Bulk Shipping and Star Bulk Carriers 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.