Correlation Between Genco Shipping and CECO ENVIRONMENTAL
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and CECO ENVIRONMENTAL 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 CECO ENVIRONMENTAL 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 CECO ENVIRONMENTAL, you can compare the effects of market volatilities on Genco Shipping and CECO ENVIRONMENTAL 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 CECO ENVIRONMENTAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and CECO ENVIRONMENTAL.
Diversification Opportunities for Genco Shipping and CECO ENVIRONMENTAL
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Genco and CECO is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and CECO ENVIRONMENTAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CECO ENVIRONMENTAL 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 CECO ENVIRONMENTAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CECO ENVIRONMENTAL has no effect on the direction of Genco Shipping i.e., Genco Shipping and CECO ENVIRONMENTAL go up and down completely randomly.
Pair Corralation between Genco Shipping and CECO ENVIRONMENTAL
Assuming the 90 days trading horizon Genco Shipping is expected to generate 2.1 times less return on investment than CECO ENVIRONMENTAL. But when comparing it to its historical volatility, Genco Shipping Trading is 1.38 times less risky than CECO ENVIRONMENTAL. It trades about 0.06 of its potential returns per unit of risk. CECO ENVIRONMENTAL is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,800 in CECO ENVIRONMENTAL on September 3, 2024 and sell it today you would earn a total of 1,292 from holding CECO ENVIRONMENTAL or generate 71.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genco Shipping Trading vs. CECO ENVIRONMENTAL
Performance |
| Timeline |
| Genco Shipping Trading |
| CECO ENVIRONMENTAL |
Genco Shipping and CECO ENVIRONMENTAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and CECO ENVIRONMENTAL
The main advantage of trading using opposite Genco Shipping and CECO ENVIRONMENTAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, CECO ENVIRONMENTAL 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 CECO ENVIRONMENTAL will offset losses from the drop in CECO ENVIRONMENTAL'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 |
| CECO ENVIRONMENTAL vs. TOTAL GABON | CECO ENVIRONMENTAL vs. Walgreens Boots Alliance | CECO ENVIRONMENTAL vs. Peak Resources Limited |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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