Correlation Between Genco Shipping and Capri Holdings
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and Capri Holdings 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 Capri Holdings 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 Capri Holdings Limited, you can compare the effects of market volatilities on Genco Shipping and Capri Holdings 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 Capri Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and Capri Holdings.
Diversification Opportunities for Genco Shipping and Capri Holdings
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Genco and Capri is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Capri Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capri Holdings 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 Capri Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capri Holdings has no effect on the direction of Genco Shipping i.e., Genco Shipping and Capri Holdings go up and down completely randomly.
Pair Corralation between Genco Shipping and Capri Holdings
Assuming the 90 days trading horizon Genco Shipping is expected to generate 2.92 times less return on investment than Capri Holdings. But when comparing it to its historical volatility, Genco Shipping Trading is 2.34 times less risky than Capri Holdings. It trades about 0.16 of its potential returns per unit of risk. Capri Holdings Limited is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,853 in Capri Holdings Limited on September 5, 2024 and sell it today you would earn a total of 360.00 from holding Capri Holdings Limited or generate 19.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Genco Shipping Trading vs. Capri Holdings Limited
Performance |
| Timeline |
| Genco Shipping Trading |
| Capri Holdings |
Genco Shipping and Capri Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and Capri Holdings
The main advantage of trading using opposite Genco Shipping and Capri Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, Capri Holdings 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 Capri Holdings will offset losses from the drop in Capri Holdings' long position.| Genco Shipping vs. Wilh Wilhelmsen Holding | Genco Shipping vs. Superior Plus Corp | Genco Shipping vs. NMI Holdings | Genco Shipping vs. Origin Agritech |
| Capri Holdings vs. Meli Hotels International | Capri Holdings vs. Chuangs China Investments | Capri Holdings vs. MIRAMAR HOTEL INV | Capri Holdings vs. Playa Hotels Resorts |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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