Correlation Between TAL Education and Genco Shipping
Can any of the company-specific risk be diversified away by investing in both TAL Education 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 TAL Education and Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAL Education Group and Genco Shipping Trading, you can compare the effects of market volatilities on TAL Education 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 TAL Education with a short position of Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAL Education and Genco Shipping.
Diversification Opportunities for TAL Education and Genco Shipping
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between TAL and Genco is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding TAL Education Group 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 TAL Education 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 TAL Education Group 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 TAL Education i.e., TAL Education and Genco Shipping go up and down completely randomly.
Pair Corralation between TAL Education and Genco Shipping
Assuming the 90 days trading horizon TAL Education Group is expected to under-perform the Genco Shipping. In addition to that, TAL Education is 1.87 times more volatile than Genco Shipping Trading. It trades about -0.07 of its total potential returns per unit of risk. Genco Shipping Trading is currently generating about 0.17 per unit of volatility. If you would invest 1,404 in Genco Shipping Trading on September 2, 2024 and sell it today you would earn a total of 100.00 from holding Genco Shipping Trading or generate 7.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TAL Education Group vs. Genco Shipping Trading
Performance |
| Timeline |
| TAL Education Group |
| Genco Shipping Trading |
TAL Education and Genco Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAL Education and Genco Shipping
The main advantage of trading using opposite TAL Education and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAL Education 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.| TAL Education vs. Tradegate AG Wertpapierhandelsbank | TAL Education vs. Webster Financial | TAL Education vs. QBE Insurance Group | TAL Education vs. PKSHA TECHNOLOGY INC |
| Genco Shipping vs. MGIC INVESTMENT | Genco Shipping vs. Apollo Investment Corp | Genco Shipping vs. KAUFMAN ET BROAD | Genco Shipping vs. Transportadora de Gas |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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