Correlation Between Solstad Offshore and Genco Shipping
Can any of the company-specific risk be diversified away by investing in both Solstad Offshore 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 Solstad Offshore and Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solstad Offshore ASA and Genco Shipping Trading, you can compare the effects of market volatilities on Solstad Offshore 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 Solstad Offshore with a short position of Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solstad Offshore and Genco Shipping.
Diversification Opportunities for Solstad Offshore and Genco Shipping
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Solstad and Genco is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Solstad Offshore ASA 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 Solstad Offshore 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 Solstad Offshore ASA 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 Solstad Offshore i.e., Solstad Offshore and Genco Shipping go up and down completely randomly.
Pair Corralation between Solstad Offshore and Genco Shipping
Assuming the 90 days trading horizon Solstad Offshore ASA is expected to under-perform the Genco Shipping. But the stock apears to be less risky and, when comparing its historical volatility, Solstad Offshore ASA is 1.28 times less risky than Genco Shipping. The stock trades about -0.27 of its potential returns per unit of risk. The Genco Shipping Trading is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,378 in Genco Shipping Trading on December 11, 2024 and sell it today you would lose (95.00) from holding Genco Shipping Trading or give up 6.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solstad Offshore ASA vs. Genco Shipping Trading
Performance |
| Timeline |
| Solstad Offshore ASA |
| Genco Shipping Trading |
Solstad Offshore and Genco Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solstad Offshore and Genco Shipping
The main advantage of trading using opposite Solstad Offshore and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solstad Offshore 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.| Solstad Offshore vs. HOCHSCHILD MINING | Solstad Offshore vs. SILICON LABORATOR | Solstad Offshore vs. TROPHY GAMES DEV | Solstad Offshore vs. GAMES OPERATORS SA |
| Genco Shipping vs. Eastman Chemical | Genco Shipping vs. Mobilezone Holding AG | Genco Shipping vs. INTERSHOP Communications Aktiengesellschaft | Genco Shipping vs. Sumitomo Chemical |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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