Correlation Between Safe Bulkers and SEACOR Marine

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

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

Diversification Opportunities for Safe Bulkers and SEACOR Marine

0.84

Correlation Coefficient

Safe Bulkers  SEACOR Marine

Very poor diversification

The 3 months correlation between Safe and SEACOR is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Safe Bulkers and SEACOR Marine Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEACOR Marine Holdings 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 SEACOR Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEACOR Marine Holdings has no effect on the direction of Safe Bulkers i.e., Safe Bulkers and SEACOR Marine go up and down completely randomly.

Pair Corralation between Safe Bulkers and SEACOR Marine

Allowing for the 90-day total investment horizon Safe Bulkers is expected to under-perform the SEACOR Marine. But the stock apears to be less risky and, when comparing its historical volatility, Safe Bulkers is 1.97 times less risky than SEACOR Marine. The stock trades about -0.25 of its potential returns per unit of risk. The SEACOR Marine Holdings is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  692.00  in SEACOR Marine Holdings on September 25, 2024 and sell it today you would lose (76.00) from holding SEACOR Marine Holdings or give up 10.98% of portfolio value over 90 days.

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

Safe Bulkers  vs.  SEACOR Marine Holdings

Safe Bulkers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Safe Bulkers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

SEACOR Marine Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SEACOR Marine Holdings 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 technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Safe Bulkers and SEACOR Marine

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

The idea behind Safe Bulkers and SEACOR Marine Holdings 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.