Correlation Between Carsales and Genco Shipping
Can any of the company-specific risk be diversified away by investing in both Carsales 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 Carsales and Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarsalesCom and Genco Shipping Trading, you can compare the effects of market volatilities on Carsales 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 Carsales with a short position of Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carsales and Genco Shipping.
Diversification Opportunities for Carsales and Genco Shipping
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Carsales and Genco is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CarsalesCom 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 Carsales 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 CarsalesCom 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 Carsales i.e., Carsales and Genco Shipping go up and down completely randomly.
Pair Corralation between Carsales and Genco Shipping
Assuming the 90 days horizon CarsalesCom is expected to generate 0.6 times more return on investment than Genco Shipping. However, CarsalesCom is 1.68 times less risky than Genco Shipping. It trades about 0.49 of its potential returns per unit of risk. Genco Shipping Trading is currently generating about 0.16 per unit of risk. If you would invest 2,260 in CarsalesCom on September 3, 2024 and sell it today you would earn a total of 280.00 from holding CarsalesCom or generate 12.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CarsalesCom vs. Genco Shipping Trading
Performance |
Timeline |
CarsalesCom |
Genco Shipping Trading |
Carsales and Genco Shipping Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Carsales and Genco Shipping
The main advantage of trading using opposite Carsales and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carsales 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.Carsales vs. Hyrican Informationssysteme Aktiengesellschaft | Carsales vs. Fidelity National Information | Carsales vs. Science Applications International | Carsales vs. Nok Airlines PCL |
Genco Shipping vs. GRIFFIN MINING LTD | Genco Shipping vs. Retail Estates NV | Genco Shipping vs. Evolution Mining Limited | Genco Shipping vs. National Retail Properties |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |