Correlation Between Genco Shipping and Ultrapetrol Bahamas

Can any of the company-specific risk be diversified away by investing in both Genco Shipping and Ultrapetrol Bahamas 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 Ultrapetrol Bahamas 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 Ultrapetrol Bahamas, you can compare the effects of market volatilities on Genco Shipping and Ultrapetrol Bahamas 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 Ultrapetrol Bahamas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and Ultrapetrol Bahamas.

Diversification Opportunities for Genco Shipping and Ultrapetrol Bahamas

0.0

Correlation Coefficient

Genco Shipping  Ultrapetrol Bahamas

Pay attention - limited upside

The 3 months correlation between Genco and Ultrapetrol is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Ultrapetrol Bahamas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ultrapetrol Bahamas 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 Ultrapetrol Bahamas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ultrapetrol Bahamas has no effect on the direction of Genco Shipping i.e., Genco Shipping and Ultrapetrol Bahamas go up and down completely randomly.

Pair Corralation between Genco Shipping and Ultrapetrol Bahamas

If you would invest (100.00) in Ultrapetrol Bahamas on November 29, 2024 and sell it today you would earn a total of  100.00  from holding Ultrapetrol Bahamas or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Genco Shipping Trading  vs.  Ultrapetrol Bahamas

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 latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Ultrapetrol Bahamas

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Genco Shipping and Ultrapetrol Bahamas

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

The idea behind Genco Shipping Trading and Ultrapetrol Bahamas 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.

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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.