Correlation Between Ultrapetrol Bahamas and Globus Maritime

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

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

Diversification Opportunities for Ultrapetrol Bahamas and Globus Maritime

-0.62

Correlation Coefficient

Ultrapetrol Bahamas  Globus Maritime

Excellent diversification

The 3 months correlation between Ultrapetrol and Globus is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ultrapetrol Bahamas and Globus Maritime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globus Maritime and Ultrapetrol Bahamas 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 Ultrapetrol Bahamas are associated (or correlated) with Globus Maritime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globus Maritime has no effect on the direction of Ultrapetrol Bahamas i.e., Ultrapetrol Bahamas and Globus Maritime go up and down completely randomly.

Pair Corralation between Ultrapetrol Bahamas and Globus Maritime

If you would invest  193.00  in Globus Maritime on June 23, 2024 and sell it today you would earn a total of  25.00  from holding Globus Maritime or generate 12.95% return on investment over 90 days.

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

Ultrapetrol Bahamas  vs.  Globus Maritime

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.

Globus Maritime

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Globus Maritime are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, Globus Maritime unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ultrapetrol Bahamas and Globus Maritime

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

The idea behind Ultrapetrol Bahamas and Globus Maritime 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.