Correlation Between Hilltop Holdings and Genco Shipping
Can any of the company-specific risk be diversified away by investing in both Hilltop Holdings 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 Hilltop Holdings and Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hilltop Holdings and Genco Shipping Trading, you can compare the effects of market volatilities on Hilltop Holdings 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 Hilltop Holdings with a short position of Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilltop Holdings and Genco Shipping.
Diversification Opportunities for Hilltop Holdings and Genco Shipping
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hilltop and Genco is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Hilltop Holdings 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 Hilltop Holdings 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 Hilltop Holdings 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 Hilltop Holdings i.e., Hilltop Holdings and Genco Shipping go up and down completely randomly.
Pair Corralation between Hilltop Holdings and Genco Shipping
Assuming the 90 days horizon Hilltop Holdings is expected to generate 1.88 times less return on investment than Genco Shipping. But when comparing it to its historical volatility, Hilltop Holdings is 1.48 times less risky than Genco Shipping. It trades about 0.03 of its potential returns per unit of risk. Genco Shipping Trading is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,144 in Genco Shipping Trading on September 5, 2024 and sell it today you would earn a total of 361.00 from holding Genco Shipping Trading or generate 31.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Hilltop Holdings vs. Genco Shipping Trading
Performance |
| Timeline |
| Hilltop Holdings |
| Genco Shipping Trading |
Hilltop Holdings and Genco Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilltop Holdings and Genco Shipping
The main advantage of trading using opposite Hilltop Holdings and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilltop Holdings 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.| Hilltop Holdings vs. Genco Shipping Trading | Hilltop Holdings vs. HK Electric Investments | Hilltop Holdings vs. Chuangs China Investments | Hilltop Holdings vs. SEI INVESTMENTS |
| Genco Shipping vs. Wilh Wilhelmsen Holding | Genco Shipping vs. Superior Plus Corp | Genco Shipping vs. NMI Holdings | Genco Shipping vs. Origin Agritech |
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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