Correlation Between Kirby and Ardmore Shpng

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

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

Diversification Opportunities for Kirby and Ardmore Shpng

0.62

Correlation Coefficient

Kirby  Ardmore Shpng

Poor diversification

The 3 months correlation between Kirby and Ardmore is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Kirby and Ardmore Shpng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ardmore Shpng and Kirby 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 Kirby are associated (or correlated) with Ardmore Shpng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ardmore Shpng has no effect on the direction of Kirby i.e., Kirby and Ardmore Shpng go up and down completely randomly.

Pair Corralation between Kirby and Ardmore Shpng

Considering the 90-day investment horizon Kirby is expected to generate 0.62 times more return on investment than Ardmore Shpng. However, Kirby is 1.62 times less risky than Ardmore Shpng. It trades about -0.02 of its potential returns per unit of risk. Ardmore Shpng is currently generating about -0.09 per unit of risk. If you would invest  10,598  in Kirby on December 27, 2024 and sell it today you would lose (309.00) from holding Kirby or give up 2.92% of portfolio value over 90 days.

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

Kirby  vs.  Ardmore Shpng

Kirby

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kirby has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Kirby is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Ardmore Shpng

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ardmore Shpng has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Kirby and Ardmore Shpng

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

The idea behind Kirby and Ardmore Shpng 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .