Correlation Between Genco Shipping and Kering SA

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

Diversification Opportunities for Genco Shipping and Kering SA

-0.09

Correlation Coefficient

Genco Shipping  Kering SA

Good diversification

The 3 months correlation between Genco and Kering is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA 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 Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of Genco Shipping i.e., Genco Shipping and Kering SA go up and down completely randomly.

Pair Corralation between Genco Shipping and Kering SA

Assuming the 90 days trading horizon Genco Shipping Trading is expected to generate 1.32 times more return on investment than Kering SA. However, Genco Shipping is 1.32 times more volatile than Kering SA. It trades about 0.01 of its potential returns per unit of risk. Kering SA is currently generating about -0.07 per unit of risk. If you would invest  1,345  in Genco Shipping Trading on October 5, 2024 and sell it today you would lose (49.00) from holding Genco Shipping Trading or give up 3.64% of portfolio value over 90 days.

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

Genco Shipping Trading  vs.  Kering SA

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 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.

Kering SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kering SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Kering SA 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 Kering SA

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

The idea behind Genco Shipping Trading and Kering SA 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.