Correlation Between Genco Shipping and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and Solstad Offshore 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 Solstad Offshore 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 Solstad Offshore ASA, you can compare the effects of market volatilities on Genco Shipping and Solstad Offshore 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 Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and Solstad Offshore.
Diversification Opportunities for Genco Shipping and Solstad Offshore
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Genco and Solstad is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Solstad Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offshore ASA 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 Solstad Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstad Offshore ASA has no effect on the direction of Genco Shipping i.e., Genco Shipping and Solstad Offshore go up and down completely randomly.
Pair Corralation between Genco Shipping and Solstad Offshore
Assuming the 90 days trading horizon Genco Shipping is expected to generate 3.22 times less return on investment than Solstad Offshore. But when comparing it to its historical volatility, Genco Shipping Trading is 3.02 times less risky than Solstad Offshore. It trades about 0.19 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 278.00 in Solstad Offshore ASA on September 1, 2024 and sell it today you would earn a total of 71.00 from holding Solstad Offshore ASA or generate 25.54% 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. Solstad Offshore ASA
Performance |
| Timeline |
| Genco Shipping Trading |
| Solstad Offshore ASA |
Genco Shipping and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and Solstad Offshore
The main advantage of trading using opposite Genco Shipping and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, Solstad Offshore 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 Solstad Offshore will offset losses from the drop in Solstad Offshore'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 |
| Solstad Offshore vs. Tradeweb Markets | Solstad Offshore vs. National Retail Properties | Solstad Offshore vs. Zoom Video Communications | Solstad Offshore vs. Auto Trader Group |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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