If you’ve been investing in shares for the longest time, chances are that your portfolio is not as diverse as it should be. This is because the majority of people invest in stocks from one industry or type of company. Financial experts believe that diversity helps to balance. And increase profits over the long term, so diversify your portfolio with marine shipping stocks! These stocks have proven to be good investments as they have a low correlation with other stocks and sectors.
A correlation is a measure of the strength of association between two different things. A high correlation means that two different things move together, usually in the same direction.
Low correlation also means that they don’t always move in the same direction, but not necessarily in opposite directions either. High correlations can be a good thing or a bad thing depending on how you perceive them.
If they are high and positive, it means that an investment makes a profit when another investment gains value and vice versa. Positive correlations are known as “asset-allocation complements” because they complement one another to create diversification among various asset classes and investments in stocks of shipping companies.
What is marine shipping?
Marine shipping is the process of transporting cargo and people from one place to another via ships. Many factors are involved in the success of marine shipping such as the world economy, the weather, trends and technology. That’s why investors must be selective when choosing marine shipping stocks to invest in.
Financial experts believe that diversifying your portfolio with marine transportation stocks can help you generate more profits in a shorter amount of time. This is particularly true for those investors that have a long-term investment horizon as it can help balance their portfolio and increase its growth potential.
Marine transportation stocks are also known because they are less correlated with other industries and types of companies. This means that they do not follow the trend of other stocks, which can help in the portfolio’s overall diversification.
What are marine shipping stocks?
There are many marine transportation companies out there. In fact, around 90% of global trade is done via ships. Marine shipping stocks include companies that operate freight and passenger ships. They transport people and goods from one place to another. The shipping industry is growing each year as traffic increases globally and there is a huge demand for shipbuilding services. Some of the largest high-performing marine transportation companies include Diana Shipping Inc., Intrepid Potash Inc., Nordic American Tankers Ltd., Dryships Inc. and TUI AG.
Why diversify with marine shipping stocks?
Marine transportation stocks have proven to be a good investment as they are less correlated to the overall market and other industries. This means that they are more likely to produce steady returns over the long term. Another reason why many analysts believe that it is a good idea to diversify your portfolio when investing in marine transportation stocks is that it helps reduce the chances of risks.
Are there any risks involved with investing in these stocks?
Particular care should be taken when choosing marine transportation stocks. You need to evaluate the risk levels of each individual company or group holding before investing. This depends on which company you decide to invest in and whether it is a blue-chip stock or not.
High-risk companies include those that are involved in the shipping industry. That’s because they have different types of risks associated with them, such as commercial risks and operational risks. Investing in other types of companies can also increase the risk levels of marine transportation stocks.
Lower-risk companies include financial leasing, technology and energy stocks, among others. This is because most of these industries don’t have commercial or operational risks. Investors that decide to invest in these types of companies should make sure that they are familiar with their areas of expertise before investing.
