Correlation Between Eagle Bulk and TOP Ships

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

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

Diversification Opportunities for Eagle Bulk and TOP Ships

-0.67

Correlation Coefficient

Eagle Bulk  TOP Ships

Excellent diversification

The 3 months correlation between Eagle and TOP is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Bulk Shipping and TOP Ships in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOP Ships and Eagle Bulk 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 Eagle Bulk Shipping are associated (or correlated) with TOP Ships. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOP Ships has no effect on the direction of Eagle Bulk i.e., Eagle Bulk and TOP Ships go up and down completely randomly.

Pair Corralation between Eagle Bulk and TOP Ships

If you would invest  4,350  in Eagle Bulk Shipping on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Eagle Bulk Shipping or generate 0.0% return on investment over 90 days.

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

Eagle Bulk Shipping  vs.  TOP Ships

Eagle Bulk Shipping

Risk-Adjusted Performance

0 of 100

Very Weak

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

TOP Ships

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TOP Ships has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Eagle Bulk and TOP Ships

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

The idea behind Eagle Bulk Shipping and TOP Ships 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.