Correlation Between Genco Shipping and Cogent Communications
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and Cogent 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 Cogent 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 Cogent Communications Holdings, you can compare the effects of market volatilities on Genco Shipping and Cogent 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 Cogent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and Cogent Communications.
Diversification Opportunities for Genco Shipping and Cogent Communications
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Genco and Cogent is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Cogent Communications Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogent 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 Cogent Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogent Communications has no effect on the direction of Genco Shipping i.e., Genco Shipping and Cogent Communications go up and down completely randomly.
Pair Corralation between Genco Shipping and Cogent Communications
Assuming the 90 days trading horizon Genco Shipping Trading is expected to generate 1.87 times more return on investment than Cogent Communications. However, Genco Shipping is 1.87 times more volatile than Cogent Communications Holdings. It trades about 0.21 of its potential returns per unit of risk. Cogent Communications Holdings is currently generating about -0.08 per unit of risk. If you would invest 1,308 in Genco Shipping Trading on October 24, 2024 and sell it today you would earn a total of 127.00 from holding Genco Shipping Trading or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genco Shipping Trading vs. Cogent Communications Holdings
Performance |
| Timeline |
| Genco Shipping Trading |
| Cogent Communications |
Genco Shipping and Cogent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and Cogent Communications
The main advantage of trading using opposite Genco Shipping and Cogent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, Cogent 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 Cogent Communications will offset losses from the drop in Cogent Communications' 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 |
| Cogent Communications vs. ecotel communication ag | Cogent Communications vs. CHRYSALIS INVESTMENTS LTD | Cogent Communications vs. AOYAMA TRADING | Cogent Communications vs. Genco Shipping Trading |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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