Correlation Between Genco Shipping and Rollins
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and Rollins 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 Rollins 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 Rollins, you can compare the effects of market volatilities on Genco Shipping and Rollins 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 Rollins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and Rollins.
Diversification Opportunities for Genco Shipping and Rollins
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Genco and Rollins is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Rollins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rollins 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 Rollins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rollins has no effect on the direction of Genco Shipping i.e., Genco Shipping and Rollins go up and down completely randomly.
Pair Corralation between Genco Shipping and Rollins
Assuming the 90 days trading horizon Genco Shipping Trading is expected to generate 1.55 times more return on investment than Rollins. However, Genco Shipping is 1.55 times more volatile than Rollins. It trades about 0.04 of its potential returns per unit of risk. Rollins is currently generating about 0.05 per unit of risk. If you would invest 1,122 in Genco Shipping Trading on September 4, 2024 and sell it today you would earn a total of 382.00 from holding Genco Shipping Trading or generate 34.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Genco Shipping Trading vs. Rollins
Performance |
| Timeline |
| Genco Shipping Trading |
| Rollins |
Genco Shipping and Rollins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and Rollins
The main advantage of trading using opposite Genco Shipping and Rollins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, Rollins 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 Rollins will offset losses from the drop in Rollins' long position.| Genco Shipping vs. BW LPG Limited | Genco Shipping vs. Wilh Wilhelmsen Holding | Genco Shipping vs. Superior Plus Corp | Genco Shipping vs. NMI Holdings |
| Rollins vs. Automatic Data Processing | Rollins vs. Fiserv Inc | Rollins vs. Paychex | Rollins vs. Experian plc |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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