Correlation Between Genco Shipping and GFL ENVIRONM
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and GFL ENVIRONM 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 GFL ENVIRONM 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 GFL ENVIRONM, you can compare the effects of market volatilities on Genco Shipping and GFL ENVIRONM 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 GFL ENVIRONM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and GFL ENVIRONM.
Diversification Opportunities for Genco Shipping and GFL ENVIRONM
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Genco and GFL is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and GFL ENVIRONM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFL ENVIRONM 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 GFL ENVIRONM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFL ENVIRONM has no effect on the direction of Genco Shipping i.e., Genco Shipping and GFL ENVIRONM go up and down completely randomly.
Pair Corralation between Genco Shipping and GFL ENVIRONM
Assuming the 90 days trading horizon Genco Shipping is expected to generate 1.89 times less return on investment than GFL ENVIRONM. In addition to that, Genco Shipping is 1.09 times more volatile than GFL ENVIRONM. It trades about 0.06 of its total potential returns per unit of risk. GFL ENVIRONM is currently generating about 0.12 per unit of volatility. If you would invest 2,636 in GFL ENVIRONM on September 3, 2024 and sell it today you would earn a total of 1,884 from holding GFL ENVIRONM or generate 71.47% 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. GFL ENVIRONM
Performance |
| Timeline |
| Genco Shipping Trading |
| GFL ENVIRONM |
Genco Shipping and GFL ENVIRONM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and GFL ENVIRONM
The main advantage of trading using opposite Genco Shipping and GFL ENVIRONM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, GFL ENVIRONM 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 GFL ENVIRONM will offset losses from the drop in GFL ENVIRONM's long position.| Genco Shipping vs. GRIFFIN MINING LTD | Genco Shipping vs. Retail Estates NV | Genco Shipping vs. Evolution Mining Limited | Genco Shipping vs. National Retail Properties |
| GFL ENVIRONM vs. TIANDE CHEMICAL | GFL ENVIRONM vs. PennyMac Mortgage Investment | GFL ENVIRONM vs. KINGBOARD CHEMICAL | GFL ENVIRONM vs. SEI INVESTMENTS |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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