Correlation Between Safe Bulkers and RB Global

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

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

Diversification Opportunities for Safe Bulkers and RB Global

0.78

Correlation Coefficient

Safe Bulkers  RB Global

Poor diversification

The 3 months correlation between Safe and RBA is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Safe Bulkers and RB Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RB Global 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 RB Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RB Global has no effect on the direction of Safe Bulkers i.e., Safe Bulkers and RB Global go up and down completely randomly.

Pair Corralation between Safe Bulkers and RB Global

Allowing for the 90-day total investment horizon Safe Bulkers is expected to generate 1.97 times less return on investment than RB Global. In addition to that, Safe Bulkers is 1.33 times more volatile than RB Global. It trades about 0.04 of its total potential returns per unit of risk. RB Global is currently generating about 0.1 per unit of volatility. If you would invest  9,147  in RB Global on December 26, 2024 and sell it today you would earn a total of  905.00  from holding RB Global or generate 9.89% return on investment over 90 days.

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

Safe Bulkers  vs.  RB Global

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. Despite somewhat strong fundamental drivers, Safe Bulkers is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

RB Global

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in RB Global are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, RB Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Safe Bulkers and RB Global

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

The idea behind Safe Bulkers and RB Global 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.