Correlation Between Genco Shipping and ScanSource
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and ScanSource 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 ScanSource 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 ScanSource, you can compare the effects of market volatilities on Genco Shipping and ScanSource 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 ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and ScanSource.
Diversification Opportunities for Genco Shipping and ScanSource
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Genco and ScanSource is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource 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 ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of Genco Shipping i.e., Genco Shipping and ScanSource go up and down completely randomly.
Pair Corralation between Genco Shipping and ScanSource
Assuming the 90 days trading horizon Genco Shipping Trading is expected to under-perform the ScanSource. But the stock apears to be less risky and, when comparing its historical volatility, Genco Shipping Trading is 1.25 times less risky than ScanSource. The stock trades about -0.31 of its potential returns per unit of risk. The ScanSource is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,860 in ScanSource on September 13, 2024 and sell it today you would earn a total of 0.00 from holding ScanSource or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genco Shipping Trading vs. ScanSource
Performance |
| Timeline |
| Genco Shipping Trading |
| ScanSource |
Genco Shipping and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and ScanSource
The main advantage of trading using opposite Genco Shipping and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, ScanSource 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 ScanSource will offset losses from the drop in ScanSource's long position.| Genco Shipping vs. Superior Plus Corp | Genco Shipping vs. SIVERS SEMICONDUCTORS AB | Genco Shipping vs. CHINA HUARONG ENERHD 50 | Genco Shipping vs. NORDIC HALIBUT AS |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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