Correlation Between Seanergy Maritime and Toro

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

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

Diversification Opportunities for Seanergy Maritime and Toro

0.76

Correlation Coefficient

Seanergy Maritime  Toro

Poor diversification

The 3 months correlation between Seanergy and Toro is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Seanergy Maritime Holdings and Toro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toro and Seanergy 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 Seanergy Maritime Holdings are associated (or correlated) with Toro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toro has no effect on the direction of Seanergy Maritime i.e., Seanergy Maritime and Toro go up and down completely randomly.

Pair Corralation between Seanergy Maritime and Toro

Given the investment horizon of 90 days Seanergy Maritime Holdings is expected to generate 0.93 times more return on investment than Toro. However, Seanergy Maritime Holdings is 1.08 times less risky than Toro. It trades about -0.18 of its potential returns per unit of risk. Toro is currently generating about -0.17 per unit of risk. If you would invest  1,087  in Seanergy Maritime Holdings on September 3, 2024 and sell it today you would lose (279.00) from holding Seanergy Maritime Holdings or give up 25.67% of portfolio value over 90 days.

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

Seanergy Maritime Holdings  vs.  Toro

Seanergy Maritime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seanergy Maritime Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Toro

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Toro has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting 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.

Pair Trading with Seanergy Maritime and Toro

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

The idea behind Seanergy Maritime Holdings and Toro 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.