Correlation Between Genco Shipping and Magic Software
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and Magic Software 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 Magic Software 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 Magic Software Enterprises, you can compare the effects of market volatilities on Genco Shipping and Magic Software 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 Magic Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and Magic Software.
Diversification Opportunities for Genco Shipping and Magic Software
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Genco and Magic is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Magic Software Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magic Software Enter 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 Magic Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magic Software Enter has no effect on the direction of Genco Shipping i.e., Genco Shipping and Magic Software go up and down completely randomly.
Pair Corralation between Genco Shipping and Magic Software
Assuming the 90 days trading horizon Genco Shipping is expected to generate 1.17 times less return on investment than Magic Software. But when comparing it to its historical volatility, Genco Shipping Trading is 1.54 times less risky than Magic Software. It trades about 0.19 of its potential returns per unit of risk. Magic Software Enterprises is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,010 in Magic Software Enterprises on September 1, 2024 and sell it today you would earn a total of 90.00 from holding Magic Software Enterprises or generate 8.91% 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. Magic Software Enterprises
Performance |
| Timeline |
| Genco Shipping Trading |
| Magic Software Enter |
Genco Shipping and Magic Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and Magic Software
The main advantage of trading using opposite Genco Shipping and Magic Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, Magic Software 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 Magic Software will offset losses from the drop in Magic Software's long position.| Genco Shipping vs. Clarkson PLC | Genco Shipping vs. Wilh Wilhelmsen Holding | Genco Shipping vs. Superior Plus Corp | Genco Shipping vs. NMI Holdings |
| Magic Software vs. Synopsys | Magic Software vs. Superior Plus Corp | Magic Software vs. NMI Holdings | Magic Software vs. Origin Agritech |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |