Correlation Between Genco Shipping and Toro
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and Toro 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 Toro 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 Toro, you can compare the effects of market volatilities on Genco Shipping and Toro 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 Toro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and Toro.
Diversification Opportunities for Genco Shipping and Toro
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Genco and Toro is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Toro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toro 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 Toro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toro has no effect on the direction of Genco Shipping i.e., Genco Shipping and Toro go up and down completely randomly.
Pair Corralation between Genco Shipping and Toro
Considering the 90-day investment horizon Genco Shipping Trading is expected to generate 0.57 times more return on investment than Toro. However, Genco Shipping Trading is 1.74 times less risky than Toro. It trades about 0.12 of its potential returns per unit of risk. Toro is currently generating about -0.27 per unit of risk. If you would invest 1,530 in Genco Shipping Trading on August 31, 2024 and sell it today you would earn a total of 73.00 from holding Genco Shipping Trading or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genco Shipping Trading vs. Toro
Performance |
| Timeline |
| Genco Shipping Trading |
| Toro |
Genco Shipping and Toro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and Toro
The main advantage of trading using opposite Genco Shipping and Toro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, Toro 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 Toro will offset losses from the drop in Toro'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 |
| Toro vs. Seanergy Maritime Holdings | Toro vs. Globus Maritime | Toro vs. TOP Ships | Toro vs. Diana Shipping |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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