Correlation Between Nordic American and Genco Shipping

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Nordic American 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 Nordic American and Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordic American Tankers and Genco Shipping Trading, you can compare the effects of market volatilities on Nordic American 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 Nordic American with a short position of Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordic American and Genco Shipping.

Diversification Opportunities for Nordic American and Genco Shipping

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Nordic and Genco is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Nordic American Tankers 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 Nordic American 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 Nordic American Tankers 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 Nordic American i.e., Nordic American and Genco Shipping go up and down completely randomly.

Pair Corralation between Nordic American and Genco Shipping

Considering the 90-day investment horizon Nordic American Tankers is expected to generate 1.21 times more return on investment than Genco Shipping. However, Nordic American is 1.21 times more volatile than Genco Shipping Trading. It trades about 0.06 of its potential returns per unit of risk. Genco Shipping Trading is currently generating about 0.0 per unit of risk. If you would invest  241.00  in Nordic American Tankers on December 27, 2024 and sell it today you would earn a total of  15.00  from holding Nordic American Tankers or generate 6.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Nordic American Tankers  vs.  Genco Shipping Trading

 Performance 
       Timeline  
Nordic American Tankers 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Nordic American Tankers are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Nordic American may actually be approaching a critical reversion point that can send shares even higher in April 2025.
Genco Shipping Trading 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
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.

Nordic American and Genco Shipping Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nordic American and Genco Shipping

The main advantage of trading using opposite Nordic American and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordic American 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 Nordic American Tankers 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

Other Complementary Tools

Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum