Correlation Between Western Copper and Genco Shipping
Can any of the company-specific risk be diversified away by investing in both Western Copper and Genco 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 Western Copper and Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper and and Genco Shipping Trading, you can compare the effects of market volatilities on Western Copper and Genco 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 Western Copper with a short position of Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and Genco Shipping.
Diversification Opportunities for Western Copper and Genco Shipping
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Genco is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Genco Shipping Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genco Shipping Trading and Western Copper 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 Western Copper and are associated (or correlated) with Genco Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genco Shipping Trading has no effect on the direction of Western Copper i.e., Western Copper and Genco Shipping go up and down completely randomly.
Pair Corralation between Western Copper and Genco Shipping
Assuming the 90 days trading horizon Western Copper is expected to generate 13.65 times less return on investment than Genco Shipping. In addition to that, Western Copper is 1.05 times more volatile than Genco Shipping Trading. It trades about 0.01 of its total potential returns per unit of risk. Genco Shipping Trading is currently generating about 0.21 per unit of volatility. If you would invest 1,308 in Genco Shipping Trading on October 24, 2024 and sell it today you would earn a total of 127.00 from holding Genco Shipping Trading or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. Genco Shipping Trading
Performance |
| Timeline |
| Western Copper |
| Genco Shipping Trading |
Western Copper and Genco Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and Genco Shipping
The main advantage of trading using opposite Western Copper and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper position performs unexpectedly, Genco 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 Genco Shipping will offset losses from the drop in Genco Shipping's long position.| Western Copper vs. Algonquin Power Utilities | Western Copper vs. MINCO SILVER | Western Copper vs. Endeavour Mining PLC | Western Copper vs. Singapore Airlines Limited |
| Genco Shipping vs. Diamyd Medical AB | Genco Shipping vs. Western Copper and | Genco Shipping vs. Zijin Mining Group | Genco Shipping vs. CVR Medical Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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