Correlation Between Pangaea Logistic and Costamare

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

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

Diversification Opportunities for Pangaea Logistic and Costamare

0.71

Correlation Coefficient

Pangaea Logistic  Costamare

Poor diversification

The 3 months correlation between Pangaea and Costamare is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Pangaea Logistic and Costamare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costamare and Pangaea Logistic 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 Pangaea Logistic are associated (or correlated) with Costamare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costamare has no effect on the direction of Pangaea Logistic i.e., Pangaea Logistic and Costamare go up and down completely randomly.

Pair Corralation between Pangaea Logistic and Costamare

Given the investment horizon of 90 days Pangaea Logistic is expected to under-perform the Costamare. In addition to that, Pangaea Logistic is 1.13 times more volatile than Costamare. It trades about -0.1 of its total potential returns per unit of risk. Costamare is currently generating about 0.01 per unit of volatility. If you would invest  1,329  in Costamare on September 2, 2024 and sell it today you would lose (9.00) from holding Costamare or give up 0.68% of portfolio value over 90 days.

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

Pangaea Logistic  vs.  Costamare

Pangaea Logistic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pangaea Logistic has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Costamare

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Pangaea Logistic and Costamare

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

The idea behind Pangaea Logistic and Costamare 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.