Correlation Between Genco Shipping and Globex Mining
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and Globex Mining 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 Globex Mining 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 Globex Mining Enterprises, you can compare the effects of market volatilities on Genco Shipping and Globex Mining 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 Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and Globex Mining.
Diversification Opportunities for Genco Shipping and Globex Mining
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Genco and Globex is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises 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 Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of Genco Shipping i.e., Genco Shipping and Globex Mining go up and down completely randomly.
Pair Corralation between Genco Shipping and Globex Mining
Assuming the 90 days trading horizon Genco Shipping is expected to generate 1.51 times less return on investment than Globex Mining. In addition to that, Genco Shipping is 1.52 times more volatile than Globex Mining Enterprises. It trades about 0.21 of its total potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.47 per unit of volatility. If you would invest 76.00 in Globex Mining Enterprises on October 24, 2024 and sell it today you would earn a total of 12.00 from holding Globex Mining Enterprises or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genco Shipping Trading vs. Globex Mining Enterprises
Performance |
| Timeline |
| Genco Shipping Trading |
| Globex Mining Enterprises |
Genco Shipping and Globex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and Globex Mining
The main advantage of trading using opposite Genco Shipping and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, Globex Mining 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 Globex Mining will offset losses from the drop in Globex Mining's long position.| Genco Shipping vs. Diamyd Medical AB | Genco Shipping vs. Western Copper and | Genco Shipping vs. Zijin Mining Group | Genco Shipping vs. CVR Medical Corp |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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