Correlation Between International Seaways and United Maritime
Can any of the company-specific risk be diversified away by investing in both International Seaways and United 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 International Seaways and United Maritime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Seaways and United Maritime, you can compare the effects of market volatilities on International Seaways and United 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 International Seaways with a short position of United Maritime. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Seaways and United Maritime.
Diversification Opportunities for International Seaways and United Maritime
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between International and United is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding International Seaways and United Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Maritime and International Seaways 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 International Seaways are associated (or correlated) with United Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Maritime has no effect on the direction of International Seaways i.e., International Seaways and United Maritime go up and down completely randomly.
Pair Corralation between International Seaways and United Maritime
Given the investment horizon of 90 days International Seaways is expected to under-perform the United Maritime. But the stock apears to be less risky and, when comparing its historical volatility, International Seaways is 1.08 times less risky than United Maritime. The stock trades about -0.51 of its potential returns per unit of risk. The United Maritime is currently generating about -0.32 of returns per unit of risk over similar time horizon. If you would invest 209.00 in United Maritime on September 24, 2024 and sell it today you would lose (26.00) from holding United Maritime or give up 12.44% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
International Seaways vs. United Maritime
Performance |
Timeline |
International Seaways |
United Maritime |
International Seaways and United Maritime Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with International Seaways and United Maritime
The main advantage of trading using opposite International Seaways and United Maritime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Seaways position performs unexpectedly, United 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 United Maritime will offset losses from the drop in United Maritime's long position.International Seaways vs. United Maritime | International Seaways vs. Globus Maritime | International Seaways vs. Castor Maritime | International Seaways vs. Safe Bulkers |
United Maritime vs. TOP Ships | United Maritime vs. Globus Maritime | United Maritime vs. Castor Maritime | United Maritime vs. Safe Bulkers |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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