Correlation Between Genco Shipping and AOYAMA TRADING

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

Diversification Opportunities for Genco Shipping and AOYAMA TRADING

0.16

Correlation Coefficient

Genco Shipping  AOYAMA TRADING

Average diversification

The 3 months correlation between Genco and AOYAMA is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and AOYAMA TRADING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOYAMA TRADING 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 AOYAMA TRADING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOYAMA TRADING has no effect on the direction of Genco Shipping i.e., Genco Shipping and AOYAMA TRADING go up and down completely randomly.

Pair Corralation between Genco Shipping and AOYAMA TRADING

Assuming the 90 days trading horizon Genco Shipping Trading is expected to generate 2.05 times more return on investment than AOYAMA TRADING. However, Genco Shipping is 2.05 times more volatile than AOYAMA TRADING. It trades about -0.01 of its potential returns per unit of risk. AOYAMA TRADING is currently generating about -0.07 per unit of risk. 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

Genco Shipping Trading  vs.  AOYAMA TRADING

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.

AOYAMA TRADING

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Genco Shipping and AOYAMA TRADING

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

The idea behind Genco Shipping Trading and AOYAMA 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..