Correlation Between Apollo Medical and Genco Shipping

Can any of the company-specific risk be diversified away by investing in both Apollo Medical 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 Apollo Medical and Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apollo Medical Holdings and Genco Shipping Trading, you can compare the effects of market volatilities on Apollo Medical 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 Apollo Medical with a short position of Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apollo Medical and Genco Shipping.

Diversification Opportunities for Apollo Medical and Genco Shipping

0.48

Correlation Coefficient

Apollo Medical  Genco Shipping

Very weak diversification

The 3 months correlation between Apollo and Genco is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Apollo Medical 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 Apollo Medical 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 Apollo Medical 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 Apollo Medical i.e., Apollo Medical and Genco Shipping go up and down completely randomly.

Pair Corralation between Apollo Medical and Genco Shipping

Assuming the 90 days horizon Apollo Medical Holdings is expected to under-perform the Genco Shipping. In addition to that, Apollo Medical is 1.2 times more volatile than Genco Shipping Trading. It trades about -0.05 of its total potential returns per unit of risk. Genco Shipping Trading is currently generating about -0.01 per unit of volatility. If you would invest  1,268  in Genco Shipping Trading on December 29, 2024 and sell it today you would lose (37.00) from holding Genco Shipping Trading or give up 2.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Apollo Medical Holdings  vs.  Genco Shipping Trading

Apollo Medical Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apollo Medical Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Genco Shipping Trading

Risk-Adjusted Performance

Very Weak

Over the last 90 days Genco Shipping Trading has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Genco Shipping is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Apollo Medical and Genco Shipping

The main advantage of trading using opposite Apollo Medical and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apollo Medical 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 Apollo Medical Holdings 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.