Correlation Between Genco Shipping and HOCHSCHILD MINING

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

Diversification Opportunities for Genco Shipping and HOCHSCHILD MINING

-0.4

Correlation Coefficient

Genco Shipping  HOCHSCHILD MINING

Very good diversification

The 3 months correlation between Genco and HOCHSCHILD is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and HOCHSCHILD MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOCHSCHILD MINING 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 HOCHSCHILD MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOCHSCHILD MINING has no effect on the direction of Genco Shipping i.e., Genco Shipping and HOCHSCHILD MINING go up and down completely randomly.

Pair Corralation between Genco Shipping and HOCHSCHILD MINING

Assuming the 90 days trading horizon Genco Shipping is expected to generate 412.36 times less return on investment than HOCHSCHILD MINING. But when comparing it to its historical volatility, Genco Shipping Trading is 1.67 times less risky than HOCHSCHILD MINING. It trades about 0.0 of its potential returns per unit of risk. HOCHSCHILD MINING is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  256.00  in HOCHSCHILD MINING on December 30, 2024 and sell it today you would earn a total of  71.00  from holding HOCHSCHILD MINING or generate 27.73% 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.  HOCHSCHILD MINING

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

HOCHSCHILD MINING

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HOCHSCHILD MINING are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, HOCHSCHILD MINING exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genco Shipping and HOCHSCHILD MINING

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

The idea behind Genco Shipping Trading and HOCHSCHILD MINING 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.