Correlation Between Genco Shipping and Comba Telecom

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

Diversification Opportunities for Genco Shipping and Comba Telecom

-0.58

Correlation Coefficient

Genco Shipping  Comba Telecom

Excellent diversification

The 3 months correlation between Genco and Comba is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Comba Telecom Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comba Telecom Systems 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 Comba Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comba Telecom Systems has no effect on the direction of Genco Shipping i.e., Genco Shipping and Comba Telecom go up and down completely randomly.

Pair Corralation between Genco Shipping and Comba Telecom

Assuming the 90 days trading horizon Genco Shipping Trading is expected to generate 0.78 times more return on investment than Comba Telecom. However, Genco Shipping Trading is 1.28 times less risky than Comba Telecom. It trades about 0.1 of its potential returns per unit of risk. Comba Telecom Systems is currently generating about -0.13 per unit of risk. 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

Genco Shipping Trading  vs.  Comba Telecom Systems

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.

Comba Telecom Systems

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Comba Telecom Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Comba Telecom is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Genco Shipping and Comba Telecom

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

The idea behind Genco Shipping Trading and Comba Telecom Systems 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.