Correlation Between Genco Shipping and Caravelle International
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and Caravelle International 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 Caravelle International 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 Caravelle International Group, you can compare the effects of market volatilities on Genco Shipping and Caravelle International 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 Caravelle International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and Caravelle International.
Diversification Opportunities for Genco Shipping and Caravelle International
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Genco and Caravelle is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Caravelle International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caravelle International 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 Caravelle International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caravelle International has no effect on the direction of Genco Shipping i.e., Genco Shipping and Caravelle International go up and down completely randomly.
Pair Corralation between Genco Shipping and Caravelle International
Considering the 90-day investment horizon Genco Shipping is expected to generate 1.43 times less return on investment than Caravelle International. But when comparing it to its historical volatility, Genco Shipping Trading is 3.73 times less risky than Caravelle International. It trades about 0.22 of its potential returns per unit of risk. Caravelle International Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 112.00 in Caravelle International Group on August 24, 2024 and sell it today you would earn a total of 9.00 from holding Caravelle International Group or generate 8.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genco Shipping Trading vs. Caravelle International Group
Performance |
| Timeline |
| Genco Shipping Trading |
| Caravelle International |
Genco Shipping and Caravelle International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and Caravelle International
The main advantage of trading using opposite Genco Shipping and Caravelle International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, Caravelle International 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 Caravelle International will offset losses from the drop in Caravelle International'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 |
| Caravelle International vs. Oceanpal | Caravelle International vs. Safe Bulkers | Caravelle International vs. Safe Bulkers | Caravelle International vs. Safe Bulkers |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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