Correlation Between Genco Shipping and Laureate Education
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and Laureate Education 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 Laureate Education 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 Laureate Education, you can compare the effects of market volatilities on Genco Shipping and Laureate Education 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 Laureate Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and Laureate Education.
Diversification Opportunities for Genco Shipping and Laureate Education
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Genco and Laureate is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Laureate Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laureate Education 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 Laureate Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laureate Education has no effect on the direction of Genco Shipping i.e., Genco Shipping and Laureate Education go up and down completely randomly.
Pair Corralation between Genco Shipping and Laureate Education
Assuming the 90 days trading horizon Genco Shipping is expected to generate 2.14 times less return on investment than Laureate Education. In addition to that, Genco Shipping is 1.35 times more volatile than Laureate Education. It trades about 0.03 of its total potential returns per unit of risk. Laureate Education is currently generating about 0.08 per unit of volatility. If you would invest 850.00 in Laureate Education on September 3, 2024 and sell it today you would earn a total of 930.00 from holding Laureate Education or generate 109.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genco Shipping Trading vs. Laureate Education
Performance |
| Timeline |
| Genco Shipping Trading |
| Laureate Education |
Genco Shipping and Laureate Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and Laureate Education
The main advantage of trading using opposite Genco Shipping and Laureate Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, Laureate Education 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 Laureate Education will offset losses from the drop in Laureate Education'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 |
| Laureate Education vs. SENECA FOODS A | Laureate Education vs. PT Global Mediacom | Laureate Education vs. PREMIER FOODS | Laureate Education vs. United Natural Foods |
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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