Correlation Between Globus Maritime and Kirby

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

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

Diversification Opportunities for Globus Maritime and Kirby

-0.78

Correlation Coefficient

Globus Maritime  Kirby

Pay attention - limited upside

The 3 months correlation between Globus and Kirby is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Globus Maritime and Kirby in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kirby and Globus 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 Globus Maritime are associated (or correlated) with Kirby. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kirby has no effect on the direction of Globus Maritime i.e., Globus Maritime and Kirby go up and down completely randomly.

Pair Corralation between Globus Maritime and Kirby

Given the investment horizon of 90 days Globus Maritime is expected to under-perform the Kirby. But the stock apears to be less risky and, when comparing its historical volatility, Globus Maritime is 1.92 times less risky than Kirby. The stock trades about -0.43 of its potential returns per unit of risk. The Kirby is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  9,884  in Kirby on February 5, 2024 and sell it today you would earn a total of  1,168  from holding Kirby or generate 11.82% return on investment over 90 days.

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

Globus Maritime  vs.  Kirby

Globus Maritime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Globus Maritime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Kirby

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kirby are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Kirby showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Globus Maritime and Kirby

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

The idea behind Globus Maritime and Kirby 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.