Correlation Between Costamare and International Container

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

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

Diversification Opportunities for Costamare and International Container

0.35

Correlation Coefficient

Costamare  International Container

Weak diversification

The 3 months correlation between Costamare and International is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Costamare and International Container Termin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Container and Costamare 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 Costamare are associated (or correlated) with International Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Container has no effect on the direction of Costamare i.e., Costamare and International Container go up and down completely randomly.

Pair Corralation between Costamare and International Container

Given the investment horizon of 90 days Costamare is expected to generate 10.94 times less return on investment than International Container. But when comparing it to its historical volatility, Costamare is 6.6 times less risky than International Container. It trades about 0.05 of its potential returns per unit of risk. International Container Terminal is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  205.00  in International Container Terminal on September 14, 2024 and sell it today you would earn a total of  437.00  from holding International Container Terminal or generate 213.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	83.6%
Values	Daily Returns

Costamare  vs.  International Container Termin

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.

International Container

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Costamare and International Container

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

The idea behind Costamare and International Container Terminal 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.