Correlation Between Okeanis Eco and Pacific Basin

Can any of the company-specific risk be diversified away by investing in both Okeanis Eco and Pacific Basin 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 Pacific Basin 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 Pacific Basin Shipping, you can compare the effects of market volatilities on Okeanis Eco and Pacific Basin 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 Pacific Basin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Okeanis Eco and Pacific Basin.

Diversification Opportunities for Okeanis Eco and Pacific Basin

-0.53

Correlation Coefficient

Okeanis Eco  Pacific Basin

Excellent diversification

The 3 months correlation between Okeanis and Pacific is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Okeanis Eco Tankers and Pacific Basin Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Basin Shipping 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 Pacific Basin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Basin Shipping has no effect on the direction of Okeanis Eco i.e., Okeanis Eco and Pacific Basin go up and down completely randomly.

Pair Corralation between Okeanis Eco and Pacific Basin

If you would invest  500.00  in Pacific Basin Shipping on September 14, 2024 and sell it today you would lose (10.00) from holding Pacific Basin Shipping or give up 2.0% of portfolio value over 90 days.

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

Okeanis Eco Tankers  vs.  Pacific Basin Shipping

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 nearly stable basic indicators, Okeanis Eco is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pacific Basin Shipping

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pacific Basin Shipping are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental drivers, Pacific Basin may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Okeanis Eco and Pacific Basin

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

The idea behind Okeanis Eco Tankers and Pacific Basin Shipping 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.