Correlation Between SPORT LISBOA and Genco Shipping
Can any of the company-specific risk be diversified away by investing in both SPORT LISBOA 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 SPORT LISBOA and Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPORT LISBOA E and Genco Shipping Trading, you can compare the effects of market volatilities on SPORT LISBOA 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 SPORT LISBOA with a short position of Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPORT LISBOA and Genco Shipping.
Diversification Opportunities for SPORT LISBOA and Genco Shipping
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between SPORT and Genco is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding SPORT LISBOA E 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 SPORT LISBOA 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 SPORT LISBOA E 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 SPORT LISBOA i.e., SPORT LISBOA and Genco Shipping go up and down completely randomly.
Pair Corralation between SPORT LISBOA and Genco Shipping
Assuming the 90 days horizon SPORT LISBOA E is expected to generate 1.34 times more return on investment than Genco Shipping. However, SPORT LISBOA is 1.34 times more volatile than Genco Shipping Trading. It trades about 0.06 of its potential returns per unit of risk. Genco Shipping Trading is currently generating about -0.04 per unit of risk. If you would invest 277.00 in SPORT LISBOA E on September 3, 2024 and sell it today you would earn a total of 59.00 from holding SPORT LISBOA E or generate 21.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPORT LISBOA E vs. Genco Shipping Trading
Performance |
| Timeline |
| SPORT LISBOA E |
| Genco Shipping Trading |
SPORT LISBOA and Genco Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPORT LISBOA and Genco Shipping
The main advantage of trading using opposite SPORT LISBOA and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORT LISBOA 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.The idea behind SPORT LISBOA E and Genco Shipping Trading pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Genco Shipping vs. GRIFFIN MINING LTD | Genco Shipping vs. Retail Estates NV | Genco Shipping vs. Evolution Mining Limited | Genco Shipping vs. National Retail Properties |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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