Correlation Between Matson and Okeanis Eco

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

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

Diversification Opportunities for Matson and Okeanis Eco

-0.76

Correlation Coefficient

Matson  Okeanis Eco

Pay attention - limited upside

The 3 months correlation between Matson and Okeanis is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Matson Inc 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 Matson 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 Matson Inc 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 Matson i.e., Matson and Okeanis Eco go up and down completely randomly.

Pair Corralation between Matson and Okeanis Eco

Given the investment horizon of 90 days Matson is expected to generate 1.22 times less return on investment than Okeanis Eco. But when comparing it to its historical volatility, Matson Inc is 1.82 times less risky than Okeanis Eco. It trades about 0.1 of its potential returns per unit of risk. Okeanis Eco Tankers is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,205  in Okeanis Eco Tankers on September 3, 2024 and sell it today you would earn a total of  936.00  from holding Okeanis Eco Tankers or generate 77.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	62.22%
Values	Daily Returns

Matson Inc  vs.  Okeanis Eco Tankers

Matson Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Matson Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Matson showed 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 conflicting performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Matson and Okeanis Eco

The main advantage of trading using opposite Matson and Okeanis Eco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matson 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 Matson Inc 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.