Correlation Between Star Bulk and Hapag Lloyd

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

By analyzing existing cross correlation between Star Bulk Carriers and Hapag Lloyd Aktiengesellschaft, you can compare the effects of market volatilities on Star Bulk and Hapag Lloyd 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 Star Bulk with a short position of Hapag Lloyd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Bulk and Hapag Lloyd.

Diversification Opportunities for Star Bulk and Hapag Lloyd

-0.01

Correlation Coefficient

Star Bulk  Hapag Lloyd

Good diversification

The 3 months correlation between Star and Hapag is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Star Bulk Carriers and Hapag Lloyd Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hapag Lloyd Aktienge and Star Bulk 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 Star Bulk Carriers are associated (or correlated) with Hapag Lloyd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hapag Lloyd Aktienge has no effect on the direction of Star Bulk i.e., Star Bulk and Hapag Lloyd go up and down completely randomly.

Pair Corralation between Star Bulk and Hapag Lloyd

Given the investment horizon of 90 days Star Bulk Carriers is expected to under-perform the Hapag Lloyd. But the stock apears to be less risky and, when comparing its historical volatility, Star Bulk Carriers is 1.71 times less risky than Hapag Lloyd. The stock trades about -0.14 of its potential returns per unit of risk. The Hapag Lloyd Aktiengesellschaft is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  7,965  in Hapag Lloyd Aktiengesellschaft on September 4, 2024 and sell it today you would earn a total of  185.00  from holding Hapag Lloyd Aktiengesellschaft or generate 2.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Star Bulk Carriers  vs.  Hapag Lloyd Aktiengesellschaft

Star Bulk Carriers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Star Bulk Carriers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential 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.

Hapag Lloyd Aktienge

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hapag Lloyd Aktiengesellschaft are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, Hapag Lloyd is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Star Bulk and Hapag Lloyd

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

The idea behind Star Bulk Carriers and Hapag Lloyd Aktiengesellschaft 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.