Correlation Between Nordic American and Genco Shipping
Can any of the company-specific risk be diversified away by investing in both Nordic American 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 Nordic American and Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic American Tankers and Genco Shipping Trading, you can compare the effects of market volatilities on Nordic American 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 Nordic American with a short position of Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic American and Genco Shipping.
Diversification Opportunities for Nordic American and Genco Shipping
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nordic and Genco is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nordic American Tankers 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 Nordic American 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 Nordic American Tankers 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 Nordic American i.e., Nordic American and Genco Shipping go up and down completely randomly.
Pair Corralation between Nordic American and Genco Shipping
Considering the 90-day investment horizon Nordic American Tankers is expected to under-perform the Genco Shipping. In addition to that, Nordic American is 1.2 times more volatile than Genco Shipping Trading. It trades about -0.25 of its total potential returns per unit of risk. Genco Shipping Trading is currently generating about 0.22 per unit of volatility. If you would invest 1,545 in Genco Shipping Trading on August 24, 2024 and sell it today you would earn a total of 128.00 from holding Genco Shipping Trading or generate 8.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordic American Tankers vs. Genco Shipping Trading
Performance |
| Timeline |
| Nordic American Tankers |
| Genco Shipping Trading |
Nordic American and Genco Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordic American and Genco Shipping
The main advantage of trading using opposite Nordic American and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic American 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.| Nordic American vs. Genco Shipping Trading | Nordic American vs. Golden Ocean Group | Nordic American vs. Star Bulk Carriers | Nordic American vs. Oceanpal |
| Genco Shipping vs. Star Bulk Carriers | Genco Shipping vs. Golden Ocean Group | Genco Shipping vs. Global Ship Lease | Genco Shipping vs. Danaos |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |