Correlation Between Genco Shipping and EAT WELL

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

Diversification Opportunities for Genco Shipping and EAT WELL

0.0

Correlation Coefficient

Genco Shipping  EAT WELL

Pay attention - limited upside

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

Pair Corralation between Genco Shipping and EAT WELL

Assuming the 90 days trading horizon Genco Shipping Trading is expected to generate 0.92 times more return on investment than EAT WELL. However, Genco Shipping Trading is 1.09 times less risky than EAT WELL. It trades about 0.01 of its potential returns per unit of risk. EAT WELL INVESTMENT is currently generating about -0.01 per unit of risk. If you would invest  1,307  in Genco Shipping Trading on October 4, 2024 and sell it today you would lose (11.00) from holding Genco Shipping Trading or give up 0.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Genco Shipping Trading  vs.  EAT WELL INVESTMENT

Genco Shipping Trading

Risk-Adjusted Performance

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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 nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

EAT WELL INVESTMENT

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Genco Shipping and EAT WELL

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

The idea behind Genco Shipping Trading and EAT WELL INVESTMENT 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.