Correlation Between StealthGas and Globus Maritime

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

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

Diversification Opportunities for StealthGas and Globus Maritime

0.47

Correlation Coefficient

StealthGas  Globus Maritime

Very weak diversification

The 3 months correlation between StealthGas and Globus is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding StealthGas and Globus Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globus Maritime and StealthGas 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 StealthGas are associated (or correlated) with Globus Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globus Maritime has no effect on the direction of StealthGas i.e., StealthGas and Globus Maritime go up and down completely randomly.

Pair Corralation between StealthGas and Globus Maritime

Given the investment horizon of 90 days StealthGas is expected to generate 0.75 times more return on investment than Globus Maritime. However, StealthGas is 1.33 times less risky than Globus Maritime. It trades about 0.01 of its potential returns per unit of risk. Globus Maritime is currently generating about -0.03 per unit of risk. If you would invest  542.00  in StealthGas on December 3, 2024 and sell it today you would earn a total of  2.00  from holding StealthGas or generate 0.37% return on investment over 90 days.

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

StealthGas  vs.  Globus Maritime

StealthGas

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in StealthGas are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, StealthGas is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Globus Maritime

Risk-Adjusted Performance

Very Weak

Over the last 90 days Globus Maritime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with StealthGas and Globus Maritime

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

The idea behind StealthGas and Globus 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.