Correlation Between StealthGas and Costamare

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

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

Diversification Opportunities for StealthGas and Costamare

0.67

Correlation Coefficient

StealthGas  Costamare

Poor diversification

The 3 months correlation between StealthGas and Costamare is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding StealthGas and Costamare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costamare and StealthGas 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 StealthGas are associated (or correlated) with Costamare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costamare has no effect on the direction of StealthGas i.e., StealthGas and Costamare go up and down completely randomly.

Pair Corralation between StealthGas and Costamare

Given the investment horizon of 90 days StealthGas is expected to generate 1.83 times less return on investment than Costamare. But when comparing it to its historical volatility, StealthGas is 1.22 times less risky than Costamare. It trades about 0.18 of its potential returns per unit of risk. Costamare is currently generating about 0.28 of returns per unit of risk over similar time horizon. 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	Significant
Accuracy	100.0%
Values	Daily Returns

StealthGas  vs.  Costamare

StealthGas

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in StealthGas are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, StealthGas unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with StealthGas and Costamare

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

The idea behind StealthGas and Costamare 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.