Correlation Between Genco Shipping and X FAB
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and X FAB 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 X FAB 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on Genco Shipping and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and X FAB.
Diversification Opportunities for Genco Shipping and X FAB
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Genco and XFB is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Genco Shipping i.e., Genco Shipping and X FAB go up and down completely randomly.
Pair Corralation between Genco Shipping and X FAB
Assuming the 90 days trading horizon Genco Shipping Trading is expected to under-perform the X FAB. But the stock apears to be less risky and, when comparing its historical volatility, Genco Shipping Trading is 1.85 times less risky than X FAB. The stock trades about -0.31 of its potential returns per unit of risk. The X FAB Silicon Foundries is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 440.00 in X FAB Silicon Foundries on September 13, 2024 and sell it today you would earn a total of 61.00 from holding X FAB Silicon Foundries or generate 13.86% 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. X FAB Silicon Foundries
Performance |
| Timeline |
| Genco Shipping Trading |
| X FAB Silicon |
Genco Shipping and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genco Shipping and X FAB
The main advantage of trading using opposite Genco Shipping and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| Genco Shipping vs. Superior Plus Corp | Genco Shipping vs. SIVERS SEMICONDUCTORS AB | Genco Shipping vs. CHINA HUARONG ENERHD 50 | Genco Shipping vs. NORDIC HALIBUT AS |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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