Correlation Between KAUFMAN ET and Genco Shipping
Can any of the company-specific risk be diversified away by investing in both KAUFMAN ET 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 KAUFMAN ET and Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KAUFMAN ET BROAD and Genco Shipping Trading, you can compare the effects of market volatilities on KAUFMAN ET 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 KAUFMAN ET with a short position of Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAUFMAN ET and Genco Shipping.
Diversification Opportunities for KAUFMAN ET and Genco Shipping
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KAUFMAN and Genco is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding KAUFMAN ET BROAD 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 KAUFMAN ET 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 KAUFMAN ET BROAD 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 KAUFMAN ET i.e., KAUFMAN ET and Genco Shipping go up and down completely randomly.
Pair Corralation between KAUFMAN ET and Genco Shipping
Assuming the 90 days trading horizon KAUFMAN ET BROAD is expected to generate 1.02 times more return on investment than Genco Shipping. However, KAUFMAN ET is 1.02 times more volatile than Genco Shipping Trading. It trades about -0.01 of its potential returns per unit of risk. Genco Shipping Trading is currently generating about -0.09 per unit of risk. If you would invest 3,250 in KAUFMAN ET BROAD on September 3, 2024 and sell it today you would lose (160.00) from holding KAUFMAN ET BROAD or give up 4.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KAUFMAN ET BROAD vs. Genco Shipping Trading
Performance |
| Timeline |
| KAUFMAN ET BROAD |
| Genco Shipping Trading |
KAUFMAN ET and Genco Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAUFMAN ET and Genco Shipping
The main advantage of trading using opposite KAUFMAN ET and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAUFMAN ET 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.| KAUFMAN ET vs. EHEALTH | KAUFMAN ET vs. APPLIED MATERIALS | KAUFMAN ET vs. Martin Marietta Materials | KAUFMAN ET vs. NEWELL RUBBERMAID |
| Genco Shipping vs. GRIFFIN MINING LTD | Genco Shipping vs. Retail Estates NV | Genco Shipping vs. Evolution Mining Limited | Genco Shipping vs. National Retail Properties |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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