Correlation Between Genco Shipping and UNITED RENTALS
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and UNITED RENTALS 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 UNITED RENTALS 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 UNITED RENTALS, you can compare the effects of market volatilities on Genco Shipping and UNITED RENTALS 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 UNITED RENTALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and UNITED RENTALS.
Diversification Opportunities for Genco Shipping and UNITED RENTALS
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Genco and UNITED is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and UNITED RENTALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED RENTALS 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 UNITED RENTALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED RENTALS has no effect on the direction of Genco Shipping i.e., Genco Shipping and UNITED RENTALS go up and down completely randomly.
Pair Corralation between Genco Shipping and UNITED RENTALS
Assuming the 90 days trading horizon Genco Shipping Trading is expected to under-perform the UNITED RENTALS. But the stock apears to be less risky and, when comparing its historical volatility, Genco Shipping Trading is 1.23 times less risky than UNITED RENTALS. The stock trades about -0.04 of its potential returns per unit of risk. The UNITED RENTALS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 64,570 in UNITED RENTALS on September 3, 2024 and sell it today you would earn a total of 16,150 from holding UNITED RENTALS or generate 25.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genco Shipping Trading vs. UNITED RENTALS
Performance |
| Timeline |
| Genco Shipping Trading |
| UNITED RENTALS |
Genco Shipping and UNITED RENTALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and UNITED RENTALS
The main advantage of trading using opposite Genco Shipping and UNITED RENTALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, UNITED RENTALS 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 UNITED RENTALS will offset losses from the drop in UNITED RENTALS's long position.| Genco Shipping vs. GRIFFIN MINING LTD | Genco Shipping vs. Retail Estates NV | Genco Shipping vs. Evolution Mining Limited | Genco Shipping vs. National Retail Properties |
| UNITED RENTALS vs. Universal Display | UNITED RENTALS vs. PLAYTIKA HOLDING DL 01 | UNITED RENTALS vs. Ming Le Sports | UNITED RENTALS vs. JD SPORTS FASH |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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