Correlation Between TOP Ships and Okeanis Eco

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

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

Diversification Opportunities for TOP Ships and Okeanis Eco

0.34

Correlation Coefficient

TOP Ships  Okeanis Eco

Weak diversification

The 3 months correlation between TOP and Okeanis is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding TOP Ships and Okeanis Eco Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okeanis Eco Tankers and TOP Ships 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 TOP Ships are associated (or correlated) with Okeanis Eco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okeanis Eco Tankers has no effect on the direction of TOP Ships i.e., TOP Ships and Okeanis Eco go up and down completely randomly.

Pair Corralation between TOP Ships and Okeanis Eco

Given the investment horizon of 90 days TOP Ships is expected to generate 2.01 times less return on investment than Okeanis Eco. But when comparing it to its historical volatility, TOP Ships is 1.29 times less risky than Okeanis Eco. It trades about 0.03 of its potential returns per unit of risk. Okeanis Eco Tankers is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,121  in Okeanis Eco Tankers on December 24, 2024 and sell it today you would earn a total of  161.00  from holding Okeanis Eco Tankers or generate 7.59% return on investment over 90 days.

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

TOP Ships  vs.  Okeanis Eco Tankers

TOP Ships

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TOP Ships are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, TOP Ships is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Okeanis Eco Tankers

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Okeanis Eco Tankers are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Okeanis Eco may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with TOP Ships and Okeanis Eco

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

The idea behind TOP Ships and Okeanis Eco Tankers 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.