Correlation Between Globus Maritime and Dynagas LNG

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

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

Diversification Opportunities for Globus Maritime and Dynagas LNG

-0.72

Correlation Coefficient

Globus Maritime  Dynagas LNG

Pay attention - limited upside

The 3 months correlation between Globus and Dynagas is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Globus Maritime and Dynagas LNG Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynagas LNG Partners and Globus Maritime 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 Globus Maritime are associated (or correlated) with Dynagas LNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynagas LNG Partners has no effect on the direction of Globus Maritime i.e., Globus Maritime and Dynagas LNG go up and down completely randomly.

Pair Corralation between Globus Maritime and Dynagas LNG

Given the investment horizon of 90 days Globus Maritime is expected to generate 1.38 times less return on investment than Dynagas LNG. In addition to that, Globus Maritime is 1.27 times more volatile than Dynagas LNG Partners. It trades about 0.14 of its total potential returns per unit of risk. Dynagas LNG Partners is currently generating about 0.24 per unit of volatility. If you would invest  472.00  in Dynagas LNG Partners on October 13, 2024 and sell it today you would earn a total of  66.00  from holding Dynagas LNG Partners or generate 13.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

Globus Maritime  vs.  Dynagas LNG Partners

Globus Maritime

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Dynagas LNG Partners

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dynagas LNG Partners are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Dynagas LNG reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Globus Maritime and Dynagas LNG

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

The idea behind Globus Maritime and Dynagas LNG Partners 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.