Correlation Between Kirby and Ultrapetrol Bahamas

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

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

Diversification Opportunities for Kirby and Ultrapetrol Bahamas

-0.4

Correlation Coefficient

Kirby  Ultrapetrol Bahamas

Very good diversification

The 3 months correlation between Kirby and Ultrapetrol is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Kirby and Ultrapetrol Bahamas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrapetrol Bahamas and Kirby 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 Kirby are associated (or correlated) with Ultrapetrol Bahamas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrapetrol Bahamas has no effect on the direction of Kirby i.e., Kirby and Ultrapetrol Bahamas go up and down completely randomly.

Pair Corralation between Kirby and Ultrapetrol Bahamas

If you would invest  11,891  in Kirby on June 23, 2024 and sell it today you would earn a total of  559.00  from holding Kirby or generate 4.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Kirby  vs.  Ultrapetrol Bahamas

Kirby

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kirby are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Kirby is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ultrapetrol Bahamas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ultrapetrol Bahamas has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ultrapetrol Bahamas is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kirby and Ultrapetrol Bahamas

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

The idea behind Kirby and Ultrapetrol Bahamas 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 Stocks Directory module to find actively traded stocks across global markets.