Correlation Between TOP Ships and Performance Shipping

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

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

Diversification Opportunities for TOP Ships and Performance Shipping

0.11

Correlation Coefficient

TOP Ships  Performance Shipping

Average diversification

The 3 months correlation between TOP and Performance is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding TOP Ships and Performance Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Shipping and TOP Ships 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 TOP Ships are associated (or correlated) with Performance Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Shipping has no effect on the direction of TOP Ships i.e., TOP Ships and Performance Shipping go up and down completely randomly.

Pair Corralation between TOP Ships and Performance Shipping

Given the investment horizon of 90 days TOP Ships is expected to generate 1.02 times less return on investment than Performance Shipping. In addition to that, TOP Ships is 2.14 times more volatile than Performance Shipping. It trades about 0.05 of its total potential returns per unit of risk. Performance Shipping is currently generating about 0.12 per unit of volatility. If you would invest  147.00  in Performance Shipping on May 18, 2025 and sell it today you would earn a total of  39.00  from holding Performance Shipping or generate 26.53% return on investment over 90 days.

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

TOP Ships  vs.  Performance Shipping

TOP Ships

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in TOP Ships are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, TOP Ships unveiled solid returns over the last few months and may actually be approaching a breakup point.

Performance Shipping

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Performance Shipping are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Performance Shipping reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TOP Ships and Performance Shipping

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

The idea behind TOP Ships and Performance Shipping 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.