Correlation Between Okeanis Eco and Havila Shipping

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

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

Diversification Opportunities for Okeanis Eco and Havila Shipping

0.9

Correlation Coefficient

Okeanis Eco  Havila Shipping

Almost no diversification

The 3 months correlation between Okeanis and Havila is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Okeanis Eco Tankers and Havila Shipping ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Havila Shipping ASA and Okeanis Eco 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 Okeanis Eco Tankers are associated (or correlated) with Havila Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Havila Shipping ASA has no effect on the direction of Okeanis Eco i.e., Okeanis Eco and Havila Shipping go up and down completely randomly.

Pair Corralation between Okeanis Eco and Havila Shipping

Assuming the 90 days trading horizon Okeanis Eco Tankers is expected to under-perform the Havila Shipping. But the stock apears to be less risky and, when comparing its historical volatility, Okeanis Eco Tankers is 1.8 times less risky than Havila Shipping. The stock trades about -0.15 of its potential returns per unit of risk. The Havila Shipping ASA is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  314.00  in Havila Shipping ASA on September 5, 2024 and sell it today you would lose (76.00) from holding Havila Shipping ASA or give up 24.2% of portfolio value over 90 days.

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

Okeanis Eco Tankers  vs.  Havila Shipping ASA

Okeanis Eco Tankers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Okeanis Eco Tankers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Havila Shipping ASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Havila Shipping ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Okeanis Eco and Havila Shipping

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

The idea behind Okeanis Eco Tankers and Havila Shipping ASA 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.