Correlation Between Safe Bulkers and Nippon Yusen

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

By analyzing existing cross correlation between Safe Bulkers and Nippon Yusen Kabushiki, you can compare the effects of market volatilities on Safe Bulkers and Nippon Yusen 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 Safe Bulkers with a short position of Nippon Yusen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe Bulkers and Nippon Yusen.

Diversification Opportunities for Safe Bulkers and Nippon Yusen

0.12

Correlation Coefficient

Safe Bulkers  Nippon Yusen

Average diversification

The 3 months correlation between Safe and Nippon is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Safe Bulkers and Nippon Yusen Kabushiki in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Yusen Kabushiki and Safe Bulkers 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 Safe Bulkers are associated (or correlated) with Nippon Yusen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Yusen Kabushiki has no effect on the direction of Safe Bulkers i.e., Safe Bulkers and Nippon Yusen go up and down completely randomly.

Pair Corralation between Safe Bulkers and Nippon Yusen

If you would invest  2,278  in Safe Bulkers on September 14, 2024 and sell it today you would earn a total of  272.00  from holding Safe Bulkers or generate 11.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.4%
Values	Daily Returns

Safe Bulkers  vs.  Nippon Yusen Kabushiki

Safe Bulkers

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Safe Bulkers are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Safe Bulkers is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Nippon Yusen Kabushiki

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nippon Yusen Kabushiki has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Nippon Yusen is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Safe Bulkers and Nippon Yusen

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

The idea behind Safe Bulkers and Nippon Yusen Kabushiki 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.