Correlation Between Consolidated Communications and Genco Shipping

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

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

Diversification Opportunities for Consolidated Communications and Genco Shipping

-0.64

Correlation Coefficient

Consolidated Communications  Genco Shipping

Excellent diversification

The 3 months correlation between Consolidated and Genco is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Communications Ho 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 Consolidated Communications 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 Consolidated Communications 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 Consolidated Communications i.e., Consolidated Communications and Genco Shipping go up and down completely randomly.

Pair Corralation between Consolidated Communications and Genco Shipping

If you would invest  1,308  in Genco Shipping Trading on October 22, 2024 and sell it today you would earn a total of  49.00  from holding Genco Shipping Trading or generate 3.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	25.0%
Values	Daily Returns

Consolidated Communications Ho  vs.  Genco Shipping Trading

Consolidated Communications

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Consolidated Communications Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, Consolidated Communications may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Genco Shipping Trading

Risk-Adjusted Performance

0 of 100

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 latest unsteady 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.

Pair Trading with Consolidated Communications and Genco Shipping

The main advantage of trading using opposite Consolidated Communications and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consolidated Communications 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 Consolidated Communications 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.