Correlation Between Caravelle International and Okeanis Eco

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

By analyzing existing cross correlation between Caravelle International Group and Okeanis Eco Tankers, you can compare the effects of market volatilities on Caravelle International and Okeanis Eco 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 Caravelle International with a short position of Okeanis Eco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caravelle International and Okeanis Eco.

Diversification Opportunities for Caravelle International and Okeanis Eco

-0.81

Correlation Coefficient

Caravelle International  Okeanis Eco

Pay attention - limited upside

The 3 months correlation between Caravelle and Okeanis is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Caravelle International Group and Okeanis Eco Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okeanis Eco Tankers and Caravelle International 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 Caravelle International Group are associated (or correlated) with Okeanis Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okeanis Eco Tankers has no effect on the direction of Caravelle International i.e., Caravelle International and Okeanis Eco go up and down completely randomly.

Pair Corralation between Caravelle International and Okeanis Eco

Given the investment horizon of 90 days Caravelle International Group is expected to generate 4.33 times more return on investment than Okeanis Eco. However, Caravelle International is 4.33 times more volatile than Okeanis Eco Tankers. It trades about 0.06 of its potential returns per unit of risk. Okeanis Eco Tankers is currently generating about -0.12 per unit of risk. If you would invest  108.00  in Caravelle International Group on September 1, 2024 and sell it today you would earn a total of  22.00  from holding Caravelle International Group or generate 20.37% return on investment over 90 days.

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

Caravelle International Group  vs.  Okeanis Eco Tankers

Caravelle International

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Caravelle International Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Caravelle International displayed solid returns over the last few months and may actually be approaching a breakup point.

Okeanis Eco Tankers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Okeanis Eco Tankers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Caravelle International and Okeanis Eco

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

The idea behind Caravelle International Group and Okeanis Eco Tankers 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.