Correlation Between Genco Shipping and Danaos
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and Danaos 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 Danaos 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 Danaos, you can compare the effects of market volatilities on Genco Shipping and Danaos 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 Danaos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and Danaos.
Diversification Opportunities for Genco Shipping and Danaos
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Genco and Danaos is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Danaos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danaos 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 Danaos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danaos has no effect on the direction of Genco Shipping i.e., Genco Shipping and Danaos go up and down completely randomly.
Pair Corralation between Genco Shipping and Danaos
Considering the 90-day investment horizon Genco Shipping Trading is expected to under-perform the Danaos. In addition to that, Genco Shipping is 1.21 times more volatile than Danaos. It trades about -0.12 of its total potential returns per unit of risk. Danaos is currently generating about 0.02 per unit of volatility. If you would invest 8,535 in Danaos on August 26, 2024 and sell it today you would earn a total of 56.00 from holding Danaos or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genco Shipping Trading vs. Danaos
Performance |
| Timeline |
| Genco Shipping Trading |
| Danaos |
Genco Shipping and Danaos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and Danaos
The main advantage of trading using opposite Genco Shipping and Danaos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, Danaos 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 Danaos will offset losses from the drop in Danaos' long position.| Genco Shipping vs. Star Bulk Carriers | Genco Shipping vs. TOP Ships | Genco Shipping vs. Seanergy Maritime Holdings | Genco Shipping vs. Performance Shipping |
| Danaos vs. Genco Shipping Trading | Danaos vs. Costamare | Danaos vs. Ardmore Shpng | Danaos vs. Global Ship Lease |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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