Correlation Between Costamare and Cool

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

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

Diversification Opportunities for Costamare and Cool

0.59

Correlation Coefficient

Costamare  Cool

Very weak diversification

The 3 months correlation between Costamare and Cool is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Costamare and Cool Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cool Company and Costamare 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 Costamare are associated (or correlated) with Cool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cool Company has no effect on the direction of Costamare i.e., Costamare and Cool go up and down completely randomly.

Pair Corralation between Costamare and Cool

Given the investment horizon of 90 days Costamare is expected to generate 1.11 times more return on investment than Cool. However, Costamare is 1.11 times more volatile than Cool Company. It trades about 0.28 of its potential returns per unit of risk. Cool Company is currently generating about 0.17 per unit of risk. If you would invest  697.00  in Costamare on May 7, 2025 and sell it today you would earn a total of  355.00  from holding Costamare or generate 50.93% return on investment over 90 days.

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

Costamare  vs.  Cool Company

Costamare

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Costamare are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Costamare exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cool Company

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cool Company are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting fundamental indicators, Cool displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Costamare and Cool

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

The idea behind Costamare and Cool Company 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 Anywhere module to track or share privately all of your investments from the convenience of any device.