Correlation Between Genco Shipping and StealthGas

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

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

Diversification Opportunities for Genco Shipping and StealthGas

0.85

Correlation Coefficient

Genco Shipping  StealthGas

Very poor diversification

The 3 months correlation between Genco and StealthGas is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and StealthGas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StealthGas and Genco Shipping 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 Genco Shipping Trading are associated (or correlated) with StealthGas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StealthGas has no effect on the direction of Genco Shipping i.e., Genco Shipping and StealthGas go up and down completely randomly.

Pair Corralation between Genco Shipping and StealthGas

Considering the 90-day investment horizon Genco Shipping Trading is expected to under-perform the StealthGas. In addition to that, Genco Shipping is 1.02 times more volatile than StealthGas. It trades about -0.38 of its total potential returns per unit of risk. StealthGas is currently generating about -0.2 per unit of volatility. If you would invest  543.00  in StealthGas on September 29, 2024 and sell it today you would lose (37.00) from holding StealthGas or give up 6.81% of portfolio value over 90 days.

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

Genco Shipping Trading  vs.  StealthGas

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 uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

StealthGas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days StealthGas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Genco Shipping and StealthGas

The main advantage of trading using opposite Genco Shipping and StealthGas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, StealthGas 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 StealthGas will offset losses from the drop in StealthGas' long position.

The idea behind Genco Shipping Trading and StealthGas 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.