Correlation Between Genco Shipping and Hilltop Holdings
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and Hilltop Holdings 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 Hilltop Holdings 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 Hilltop Holdings, you can compare the effects of market volatilities on Genco Shipping and Hilltop Holdings 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 Hilltop Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and Hilltop Holdings.
Diversification Opportunities for Genco Shipping and Hilltop Holdings
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Genco and Hilltop is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Hilltop Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilltop Holdings 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 Hilltop Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilltop Holdings has no effect on the direction of Genco Shipping i.e., Genco Shipping and Hilltop Holdings go up and down completely randomly.
Pair Corralation between Genco Shipping and Hilltop Holdings
Assuming the 90 days trading horizon Genco Shipping Trading is expected to generate 1.19 times more return on investment than Hilltop Holdings. However, Genco Shipping is 1.19 times more volatile than Hilltop Holdings. It trades about 0.04 of its potential returns per unit of risk. Hilltop Holdings is currently generating about 0.01 per unit of risk. If you would invest 1,226 in Genco Shipping Trading on September 10, 2024 and sell it today you would earn a total of 239.00 from holding Genco Shipping Trading or generate 19.49% 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. Hilltop Holdings
Performance |
| Timeline |
| Genco Shipping Trading |
| Hilltop Holdings |
Genco Shipping and Hilltop Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and Hilltop Holdings
The main advantage of trading using opposite Genco Shipping and Hilltop Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, Hilltop Holdings 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 Hilltop Holdings will offset losses from the drop in Hilltop Holdings' long position.| Genco Shipping vs. AP Mller | Genco Shipping vs. HAPAG LLOYD UNSPADR 12 | Genco Shipping vs. Hafnia Limited | Genco Shipping vs. Pacific Basin Shipping |
| Hilltop Holdings vs. WisdomTree Investments | Hilltop Holdings vs. VARIOUS EATERIES LS | Hilltop Holdings vs. ECHO INVESTMENT ZY | Hilltop Holdings vs. BJs Restaurants |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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