Correlation Between Genco Shipping and Capital Product
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and Capital Product 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 Genco Shipping and Capital Product into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genco Shipping Trading and Capital Product Partners, you can compare the effects of market volatilities on Genco Shipping and Capital Product 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 Genco Shipping with a short position of Capital Product. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and Capital Product.
Diversification Opportunities for Genco Shipping and Capital Product
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Genco and Capital is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Capital Product Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Product Partners and Genco Shipping 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 Genco Shipping Trading are associated (or correlated) with Capital Product. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Product Partners has no effect on the direction of Genco Shipping i.e., Genco Shipping and Capital Product go up and down completely randomly.
Pair Corralation between Genco Shipping and Capital Product
Considering the 90-day investment horizon Genco Shipping Trading is expected to generate 0.39 times more return on investment than Capital Product. However, Genco Shipping Trading is 2.55 times less risky than Capital Product. It trades about 0.04 of its potential returns per unit of risk. Capital Product Partners is currently generating about -0.03 per unit of risk. If you would invest 1,278 in Genco Shipping Trading on August 23, 2024 and sell it today you would earn a total of 436.00 from holding Genco Shipping Trading or generate 34.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.7% |
| Values | Daily Returns |
Genco Shipping Trading vs. Capital Product Partners
Performance |
| Timeline |
| Genco Shipping Trading |
| Capital Product Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Genco Shipping and Capital Product Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and Capital Product
The main advantage of trading using opposite Genco Shipping and Capital Product positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, Capital Product 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 Capital Product will offset losses from the drop in Capital Product's long position.| Genco Shipping vs. Star Bulk Carriers | Genco Shipping vs. Golden Ocean Group | Genco Shipping vs. Global Ship Lease | Genco Shipping vs. Danaos |
| Capital Product vs. Danaos | Capital Product vs. Global Ship Lease | Capital Product vs. Euroseas | Capital Product vs. Navios Maritime Partners |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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