Correlation Between Hapag-Lloyd Aktiengesellscha and Star Bulk

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

By analyzing existing cross correlation between Hapag Lloyd Aktiengesellschaft and Star Bulk Carriers, you can compare the effects of market volatilities on Hapag-Lloyd Aktiengesellscha 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 Hapag-Lloyd Aktiengesellscha with a short position of Star Bulk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hapag-Lloyd Aktiengesellscha and Star Bulk.

Diversification Opportunities for Hapag-Lloyd Aktiengesellscha and Star Bulk

0.25

Correlation Coefficient

Hapag-Lloyd Aktiengesellscha  Star Bulk

Modest diversification

The 3 months correlation between Hapag-Lloyd and Star is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hapag Lloyd Aktiengesellschaft 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 Hapag-Lloyd Aktiengesellscha 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 Hapag Lloyd Aktiengesellschaft 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 Hapag-Lloyd Aktiengesellscha i.e., Hapag-Lloyd Aktiengesellscha and Star Bulk go up and down completely randomly.

Pair Corralation between Hapag-Lloyd Aktiengesellscha and Star Bulk

Assuming the 90 days horizon Hapag-Lloyd Aktiengesellscha is expected to generate 2.96 times less return on investment than Star Bulk. In addition to that, Hapag-Lloyd Aktiengesellscha is 1.38 times more volatile than Star Bulk Carriers. It trades about 0.02 of its total potential returns per unit of risk. Star Bulk Carriers is currently generating about 0.07 per unit of volatility. If you would invest  1,461  in Star Bulk Carriers on December 30, 2024 and sell it today you would earn a total of  137.00  from holding Star Bulk Carriers or generate 9.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Hapag Lloyd Aktiengesellschaft  vs.  Star Bulk Carriers

Hapag-Lloyd Aktiengesellscha

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hapag Lloyd Aktiengesellschaft are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Hapag-Lloyd Aktiengesellscha is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 5 (%) 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 Hapag-Lloyd Aktiengesellscha and Star Bulk

The main advantage of trading using opposite Hapag-Lloyd Aktiengesellscha and Star Bulk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hapag-Lloyd Aktiengesellscha 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 Hapag Lloyd Aktiengesellschaft 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.

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.