Correlation Between Ultrapetrol Bahamas and Costamare

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

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

Diversification Opportunities for Ultrapetrol Bahamas and Costamare

-0.42

Correlation Coefficient

Ultrapetrol Bahamas  Costamare

Very good diversification

The 3 months correlation between Ultrapetrol and Costamare is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ultrapetrol Bahamas and Costamare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costamare and Ultrapetrol Bahamas 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 Ultrapetrol Bahamas are associated (or correlated) with Costamare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costamare has no effect on the direction of Ultrapetrol Bahamas i.e., Ultrapetrol Bahamas and Costamare go up and down completely randomly.

Pair Corralation between Ultrapetrol Bahamas and Costamare

If you would invest  1,329  in Costamare on August 31, 2024 and sell it today you would earn a total of  2.00  from holding Costamare or generate 0.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Ultrapetrol Bahamas  vs.  Costamare

Ultrapetrol Bahamas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ultrapetrol Bahamas has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ultrapetrol Bahamas is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Costamare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Costamare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Costamare is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ultrapetrol Bahamas and Costamare

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

The idea behind Ultrapetrol Bahamas and Costamare 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.