Correlation Between National Retail and Genco Shipping
Can any of the company-specific risk be diversified away by investing in both National Retail 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 National Retail and Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Retail Properties and Genco Shipping Trading, you can compare the effects of market volatilities on National Retail 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 National Retail with a short position of Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Retail and Genco Shipping.
Diversification Opportunities for National Retail and Genco Shipping
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between National and Genco is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding National Retail Properties 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 National Retail 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 National Retail Properties 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 National Retail i.e., National Retail and Genco Shipping go up and down completely randomly.
Pair Corralation between National Retail and Genco Shipping
Assuming the 90 days trading horizon National Retail is expected to generate 2.47 times less return on investment than Genco Shipping. But when comparing it to its historical volatility, National Retail Properties is 1.94 times less risky than Genco Shipping. It trades about 0.03 of its potential returns per unit of risk. Genco Shipping Trading is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,122 in Genco Shipping Trading on September 4, 2024 and sell it today you would earn a total of 382.00 from holding Genco Shipping Trading or generate 34.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
National Retail Properties vs. Genco Shipping Trading
Performance |
| Timeline |
| National Retail Prop |
| Genco Shipping Trading |
National Retail and Genco Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Retail and Genco Shipping
The main advantage of trading using opposite National Retail and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Retail 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.| National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc |
| Genco Shipping vs. BW LPG Limited | Genco Shipping vs. Wilh Wilhelmsen Holding | Genco Shipping vs. Superior Plus Corp | Genco Shipping vs. NMI Holdings |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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