Correlation Between Genco Shipping and Charter Communications
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and Charter Communications 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 Charter Communications 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 Charter Communications, you can compare the effects of market volatilities on Genco Shipping and Charter Communications 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 Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and Charter Communications.
Diversification Opportunities for Genco Shipping and Charter Communications
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Genco and Charter is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications 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 Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of Genco Shipping i.e., Genco Shipping and Charter Communications go up and down completely randomly.
Pair Corralation between Genco Shipping and Charter Communications
Assuming the 90 days trading horizon Genco Shipping Trading is expected to under-perform the Charter Communications. But the stock apears to be less risky and, when comparing its historical volatility, Genco Shipping Trading is 1.45 times less risky than Charter Communications. The stock trades about -0.09 of its potential returns per unit of risk. The Charter Communications is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 25,785 in Charter Communications on September 2, 2024 and sell it today you would earn a total of 11,555 from holding Charter Communications or generate 44.81% 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. Charter Communications
Performance |
| Timeline |
| Genco Shipping Trading |
| Charter Communications |
Genco Shipping and Charter Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and Charter Communications
The main advantage of trading using opposite Genco Shipping and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, Charter Communications 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 Charter Communications will offset losses from the drop in Charter Communications' long position.| Genco Shipping vs. MGIC INVESTMENT | Genco Shipping vs. Apollo Investment Corp | Genco Shipping vs. KAUFMAN ET BROAD | Genco Shipping vs. Transportadora de Gas |
| Charter Communications vs. ALGOMA STEEL GROUP | Charter Communications vs. CosmoSteel Holdings Limited | Charter Communications vs. GLG LIFE TECH | Charter Communications vs. Reliance Steel Aluminum |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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