Correlation Between CAIRN HOMES and Genco Shipping
Can any of the company-specific risk be diversified away by investing in both CAIRN HOMES 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 CAIRN HOMES and Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAIRN HOMES EO and Genco Shipping Trading, you can compare the effects of market volatilities on CAIRN HOMES 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 CAIRN HOMES with a short position of Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAIRN HOMES and Genco Shipping.
Diversification Opportunities for CAIRN HOMES and Genco Shipping
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CAIRN and Genco is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding CAIRN HOMES EO 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 CAIRN HOMES 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 CAIRN HOMES EO 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 CAIRN HOMES i.e., CAIRN HOMES and Genco Shipping go up and down completely randomly.
Pair Corralation between CAIRN HOMES and Genco Shipping
Assuming the 90 days horizon CAIRN HOMES EO is expected to generate 1.04 times more return on investment than Genco Shipping. However, CAIRN HOMES is 1.04 times more volatile than Genco Shipping Trading. It trades about 0.02 of its potential returns per unit of risk. Genco Shipping Trading is currently generating about -0.11 per unit of risk. If you would invest 209.00 in CAIRN HOMES EO on October 30, 2024 and sell it today you would earn a total of 1.00 from holding CAIRN HOMES EO or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAIRN HOMES EO vs. Genco Shipping Trading
Performance |
| Timeline |
| CAIRN HOMES EO |
| Genco Shipping Trading |
CAIRN HOMES and Genco Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAIRN HOMES and Genco Shipping
The main advantage of trading using opposite CAIRN HOMES and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAIRN HOMES 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.| CAIRN HOMES vs. Endeavour Mining PLC | CAIRN HOMES vs. INTER CARS SA | CAIRN HOMES vs. Cars Inc | CAIRN HOMES vs. Monument Mining Limited |
| Genco Shipping vs. Hisense Home Appliances | Genco Shipping vs. Alaska Air Group | Genco Shipping vs. Delta Air Lines | Genco Shipping vs. Ryanair Holdings plc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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