Correlation Between Seanergy Maritime and KNOT Offshore

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

By analyzing existing cross correlation between Seanergy Maritime Holdings and KNOT Offshore Partners, you can compare the effects of market volatilities on Seanergy Maritime and KNOT Offshore 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 Seanergy Maritime with a short position of KNOT Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seanergy Maritime and KNOT Offshore.

Diversification Opportunities for Seanergy Maritime and KNOT Offshore

0.93

Correlation Coefficient

Seanergy Maritime  KNOT Offshore

Almost no diversification

The 3 months correlation between Seanergy and KNOT is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Seanergy Maritime Holdings and KNOT Offshore Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KNOT Offshore Partners and Seanergy Maritime 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 Seanergy Maritime Holdings are associated (or correlated) with KNOT Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KNOT Offshore Partners has no effect on the direction of Seanergy Maritime i.e., Seanergy Maritime and KNOT Offshore go up and down completely randomly.

Pair Corralation between Seanergy Maritime and KNOT Offshore

Given the investment horizon of 90 days Seanergy Maritime Holdings is expected to generate 0.98 times more return on investment than KNOT Offshore. However, Seanergy Maritime Holdings is 1.02 times less risky than KNOT Offshore. It trades about 0.04 of its potential returns per unit of risk. KNOT Offshore Partners is currently generating about -0.02 per unit of risk. If you would invest  479.00  in Seanergy Maritime Holdings on September 30, 2024 and sell it today you would earn a total of  193.00  from holding Seanergy Maritime Holdings or generate 40.29% return on investment over 90 days.

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

Seanergy Maritime Holdings  vs.  KNOT Offshore Partners

Seanergy Maritime

Risk-Adjusted Performance

0 of 100

Very Weak

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

KNOT Offshore Partners

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Seanergy Maritime and KNOT Offshore

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

The idea behind Seanergy Maritime Holdings and KNOT Offshore Partners 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.