Correlation Between Castor Maritime and Excelerate Energy

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

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

Diversification Opportunities for Castor Maritime and Excelerate Energy

-0.86

Correlation Coefficient

Castor Maritime  Excelerate Energy

Pay attention - limited upside

The 3 months correlation between Castor and Excelerate is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Castor Maritime and Excelerate Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelerate Energy and Castor 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 Castor Maritime are associated (or correlated) with Excelerate Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelerate Energy has no effect on the direction of Castor Maritime i.e., Castor Maritime and Excelerate Energy go up and down completely randomly.

Pair Corralation between Castor Maritime and Excelerate Energy

Given the investment horizon of 90 days Castor Maritime is expected to under-perform the Excelerate Energy. In addition to that, Castor Maritime is 1.37 times more volatile than Excelerate Energy. It trades about -0.29 of its total potential returns per unit of risk. Excelerate Energy is currently generating about 0.04 per unit of volatility. If you would invest  3,008  in Excelerate Energy on September 25, 2024 and sell it today you would earn a total of  47.00  from holding Excelerate Energy or generate 1.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Castor Maritime  vs.  Excelerate Energy

Castor Maritime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Castor Maritime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Excelerate Energy

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Excelerate Energy are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Excelerate Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Castor Maritime and Excelerate Energy

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

The idea behind Castor Maritime and Excelerate Energy 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.

Check out your portfolio center.

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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.