Correlation Between Kubota and Genco Shipping
Can any of the company-specific risk be diversified away by investing in both Kubota 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 Kubota and Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kubota and Genco Shipping Trading, you can compare the effects of market volatilities on Kubota 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 Kubota with a short position of Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kubota and Genco Shipping.
Diversification Opportunities for Kubota and Genco Shipping
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kubota and Genco is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Kubota 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 Kubota 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 Kubota 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 Kubota i.e., Kubota and Genco Shipping go up and down completely randomly.
Pair Corralation between Kubota and Genco Shipping
Assuming the 90 days trading horizon Kubota is expected to generate 0.82 times more return on investment than Genco Shipping. However, Kubota is 1.21 times less risky than Genco Shipping. It trades about -0.08 of its potential returns per unit of risk. Genco Shipping Trading is currently generating about -0.31 per unit of risk. If you would invest 1,184 in Kubota on September 13, 2024 and sell it today you would lose (29.00) from holding Kubota or give up 2.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kubota vs. Genco Shipping Trading
Performance |
| Timeline |
| Kubota |
| Genco Shipping Trading |
Kubota and Genco Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kubota and Genco Shipping
The main advantage of trading using opposite Kubota and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kubota 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.| Kubota vs. SPORTING | Kubota vs. MELIA HOTELS | Kubota vs. Pebblebrook Hotel Trust | Kubota vs. Choice Hotels International |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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