Correlation Between Genco Shipping and Volkswagen
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and Volkswagen 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 Volkswagen 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 Volkswagen AG, you can compare the effects of market volatilities on Genco Shipping and Volkswagen 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 Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and Volkswagen.
Diversification Opportunities for Genco Shipping and Volkswagen
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Genco and Volkswagen is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG 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 Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG has no effect on the direction of Genco Shipping i.e., Genco Shipping and Volkswagen go up and down completely randomly.
Pair Corralation between Genco Shipping and Volkswagen
Assuming the 90 days trading horizon Genco Shipping Trading is expected to generate 2.49 times more return on investment than Volkswagen. However, Genco Shipping is 2.49 times more volatile than Volkswagen AG. It trades about 0.21 of its potential returns per unit of risk. Volkswagen AG is currently generating about 0.32 per unit of risk. If you would invest 1,308 in Genco Shipping Trading on October 23, 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 Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Genco Shipping Trading vs. Volkswagen AG
Performance |
Timeline |
Genco Shipping Trading |
Volkswagen AG |
Genco Shipping and Volkswagen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Genco Shipping and Volkswagen
The main advantage of trading using opposite Genco Shipping and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.Genco Shipping vs. Linedata Services SA | Genco Shipping vs. Alliance Data Systems | Genco Shipping vs. Richardson Electronics | Genco Shipping vs. INFORMATION SVC GRP |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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