Correlation Between Kirby and Eagle Bulk

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

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

Diversification Opportunities for Kirby and Eagle Bulk

0.0

Correlation Coefficient

Kirby  Eagle Bulk

Pay attention - limited upside

The 3 months correlation between Kirby and Eagle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kirby and Eagle Bulk Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Bulk Shipping 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 Eagle Bulk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Bulk Shipping has no effect on the direction of Kirby i.e., Kirby and Eagle Bulk go up and down completely randomly.

Pair Corralation between Kirby and Eagle Bulk

If you would invest (100.00) in Eagle Bulk Shipping on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Eagle Bulk Shipping or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Kirby  vs.  Eagle Bulk Shipping

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.

Eagle Bulk Shipping

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eagle Bulk Shipping has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Eagle Bulk is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Kirby and Eagle Bulk

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

The idea behind Kirby and Eagle Bulk Shipping 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.