Correlation Between Kirby and Genco Shipping

Can any of the company-specific risk be diversified away by investing in both Kirby and Genco Shipping 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 Kirby and Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kirby and Genco Shipping Trading, you can compare the effects of market volatilities on Kirby and Genco Shipping 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 Kirby with a short position of Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kirby and Genco Shipping.

Diversification Opportunities for Kirby and Genco Shipping

0.31

Correlation Coefficient

Kirby  Genco Shipping

Weak diversification

The 3 months correlation between Kirby and Genco is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Kirby and Genco Shipping Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genco Shipping Trading and Kirby 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 Kirby are associated (or correlated) with Genco Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genco Shipping Trading has no effect on the direction of Kirby i.e., Kirby and Genco Shipping go up and down completely randomly.

Pair Corralation between Kirby and Genco Shipping

Considering the 90-day investment horizon Kirby is expected to generate 1.0 times more return on investment than Genco Shipping. However, Kirby is 1.0 times less risky than Genco Shipping. It trades about 0.13 of its potential returns per unit of risk. Genco Shipping Trading is currently generating about 0.05 per unit of risk. If you would invest  7,315  in Kirby on September 3, 2024 and sell it today you would earn a total of  5,174  from holding Kirby or generate 70.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kirby  vs.  Genco Shipping Trading

Kirby

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kirby are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting technical and fundamental indicators, Kirby may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 quite persistent basic indicators, Genco Shipping is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Kirby and Genco Shipping

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

The idea behind Kirby and Genco Shipping 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.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.