Correlation Between Mastercard and Genco Shipping
Can any of the company-specific risk be diversified away by investing in both Mastercard 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 Mastercard and Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and Genco Shipping Trading, you can compare the effects of market volatilities on Mastercard 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 Mastercard with a short position of Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and Genco Shipping.
Diversification Opportunities for Mastercard and Genco Shipping
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mastercard and Genco is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard 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 Mastercard 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 Mastercard 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 Mastercard i.e., Mastercard and Genco Shipping go up and down completely randomly.
Pair Corralation between Mastercard and Genco Shipping
Assuming the 90 days horizon Mastercard is expected to generate 0.6 times more return on investment than Genco Shipping. However, Mastercard is 1.66 times less risky than Genco Shipping. It trades about 0.05 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 49,900 in Mastercard on September 13, 2024 and sell it today you would earn a total of 430.00 from holding Mastercard or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mastercard vs. Genco Shipping Trading
Performance |
| Timeline |
| Mastercard |
| Genco Shipping Trading |
Mastercard and Genco Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard and Genco Shipping
The main advantage of trading using opposite Mastercard and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard 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.| Mastercard vs. SPORT LISBOA E | Mastercard vs. Sportsmans Warehouse Holdings | Mastercard vs. Gaztransport Technigaz SA | Mastercard vs. Scientific Games |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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