Correlation Between Safe Bulkers and Oceanpal

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

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

Diversification Opportunities for Safe Bulkers and Oceanpal

0.05

Correlation Coefficient

Safe Bulkers  Oceanpal

Significant diversification

The 3 months correlation between Safe and Oceanpal is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Safe Bulkers and Oceanpal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oceanpal and Safe Bulkers 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 Safe Bulkers are associated (or correlated) with Oceanpal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oceanpal has no effect on the direction of Safe Bulkers i.e., Safe Bulkers and Oceanpal go up and down completely randomly.

Pair Corralation between Safe Bulkers and Oceanpal

Assuming the 90 days horizon Safe Bulkers is expected to generate 0.24 times more return on investment than Oceanpal. However, Safe Bulkers is 4.25 times less risky than Oceanpal. It trades about 0.04 of its potential returns per unit of risk. Oceanpal is currently generating about -0.13 per unit of risk. If you would invest  2,509  in Safe Bulkers on November 19, 2024 and sell it today you would earn a total of  36.00  from holding Safe Bulkers or generate 1.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.44%
Values	Daily Returns

Safe Bulkers  vs.  Oceanpal

Safe Bulkers

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Safe Bulkers are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Safe Bulkers is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Oceanpal

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oceanpal has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Safe Bulkers and Oceanpal

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

The idea behind Safe Bulkers and Oceanpal 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.