Correlation Between SBM OFFSHORE and Genco Shipping
Can any of the company-specific risk be diversified away by investing in both SBM OFFSHORE and Genco Shipping 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 SBM OFFSHORE and Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBM OFFSHORE and Genco Shipping Trading, you can compare the effects of market volatilities on SBM OFFSHORE and Genco Shipping 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 SBM OFFSHORE with a short position of Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBM OFFSHORE and Genco Shipping.
Diversification Opportunities for SBM OFFSHORE and Genco Shipping
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SBM and Genco is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding SBM OFFSHORE and Genco Shipping Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genco Shipping Trading and SBM OFFSHORE 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 SBM OFFSHORE are associated (or correlated) with Genco Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genco Shipping Trading has no effect on the direction of SBM OFFSHORE i.e., SBM OFFSHORE and Genco Shipping go up and down completely randomly.
Pair Corralation between SBM OFFSHORE and Genco Shipping
Assuming the 90 days trading horizon SBM OFFSHORE is expected to generate 9.04 times less return on investment than Genco Shipping. In addition to that, SBM OFFSHORE is 1.04 times more volatile than Genco Shipping Trading. It trades about 0.03 of its total potential returns per unit of risk. Genco Shipping Trading is currently generating about 0.28 per unit of volatility. If you would invest 1,417 in Genco Shipping Trading on August 30, 2024 and sell it today you would earn a total of 170.00 from holding Genco Shipping Trading or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBM OFFSHORE vs. Genco Shipping Trading
Performance |
| Timeline |
| SBM OFFSHORE |
| Genco Shipping Trading |
SBM OFFSHORE and Genco Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBM OFFSHORE and Genco Shipping
The main advantage of trading using opposite SBM OFFSHORE and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBM OFFSHORE position performs unexpectedly, Genco Shipping 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 Genco Shipping will offset losses from the drop in Genco Shipping's long position.| SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Apple Inc | SBM OFFSHORE vs. Superior Plus Corp | SBM OFFSHORE vs. SIVERS SEMICONDUCTORS AB |
| Genco Shipping vs. PACIFIC ONLINE | Genco Shipping vs. FAST RETAIL ADR | Genco Shipping vs. BURLINGTON STORES | Genco Shipping vs. YATRA ONLINE DL 0001 |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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