Correlation Between Alphabet and Castor Maritime

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

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

Diversification Opportunities for Alphabet and Castor Maritime

0.77

Correlation Coefficient

Alphabet  Castor Maritime

Poor diversification

The 3 months correlation between Alphabet and Castor is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C and Castor Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Castor Maritime and Alphabet 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 Alphabet Inc Class C are associated (or correlated) with Castor Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Castor Maritime has no effect on the direction of Alphabet i.e., Alphabet and Castor Maritime go up and down completely randomly.

Pair Corralation between Alphabet and Castor Maritime

Given the investment horizon of 90 days Alphabet Inc Class C is expected to under-perform the Castor Maritime. But the stock apears to be less risky and, when comparing its historical volatility, Alphabet Inc Class C is 1.34 times less risky than Castor Maritime. The stock trades about -0.12 of its potential returns per unit of risk. The Castor Maritime is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  273.00  in Castor Maritime on December 29, 2024 and sell it today you would lose (36.00) from holding Castor Maritime or give up 13.19% of portfolio value over 90 days.

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

Alphabet Inc Class C  vs.  Castor Maritime

Alphabet Class C

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alphabet Inc Class C has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Castor Maritime

Risk-Adjusted Performance

Very Weak

Over the last 90 days Castor Maritime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Alphabet and Castor Maritime

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

The idea behind Alphabet Inc Class C and Castor 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.