Correlation Between Genco Shipping and Air Transport
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and Air Transport 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 Air Transport 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 Air Transport Services, you can compare the effects of market volatilities on Genco Shipping and Air Transport 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 Air Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and Air Transport.
Diversification Opportunities for Genco Shipping and Air Transport
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Genco and Air is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services 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 Air Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of Genco Shipping i.e., Genco Shipping and Air Transport go up and down completely randomly.
Pair Corralation between Genco Shipping and Air Transport
Assuming the 90 days trading horizon Genco Shipping Trading is expected to under-perform the Air Transport. In addition to that, Genco Shipping is 2.9 times more volatile than Air Transport Services. It trades about -0.28 of its total potential returns per unit of risk. Air Transport Services is currently generating about 0.08 per unit of volatility. If you would invest 2,060 in Air Transport Services on September 12, 2024 and sell it today you would earn a total of 20.00 from holding Air Transport Services or generate 0.97% 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. Air Transport Services
Performance |
| Timeline |
| Genco Shipping Trading |
| Air Transport Services |
Genco Shipping and Air Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and Air Transport
The main advantage of trading using opposite Genco Shipping and Air Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, Air Transport 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 Air Transport will offset losses from the drop in Air Transport's long position.| Genco Shipping vs. Superior Plus Corp | Genco Shipping vs. SIVERS SEMICONDUCTORS AB | Genco Shipping vs. CHINA HUARONG ENERHD 50 | Genco Shipping vs. NORDIC HALIBUT AS |
| Air Transport vs. Aena SME SA | Air Transport vs. Superior Plus Corp | Air Transport vs. SIVERS SEMICONDUCTORS AB | Air Transport vs. Norsk Hydro ASA |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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