Correlation Between Genco Shipping and Salesforce
Can any of the company-specific risk be diversified away by investing in both Genco Shipping and Salesforce 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 Salesforce 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 Salesforce, you can compare the effects of market volatilities on Genco Shipping and Salesforce 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 Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and Salesforce.
Diversification Opportunities for Genco Shipping and Salesforce
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Genco and Salesforce is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce 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 Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salesforce has no effect on the direction of Genco Shipping i.e., Genco Shipping and Salesforce go up and down completely randomly.
Pair Corralation between Genco Shipping and Salesforce
Assuming the 90 days trading horizon Genco Shipping is expected to generate 2.65 times less return on investment than Salesforce. In addition to that, Genco Shipping is 1.34 times more volatile than Salesforce. It trades about 0.03 of its total potential returns per unit of risk. Salesforce is currently generating about 0.1 per unit of volatility. If you would invest 12,378 in Salesforce on September 11, 2024 and sell it today you would earn a total of 21,077 from holding Salesforce or generate 170.28% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Genco Shipping Trading vs. Salesforce
Performance |
Timeline |
Genco Shipping Trading |
Salesforce |
Genco Shipping and Salesforce Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Genco Shipping and Salesforce
The main advantage of trading using opposite Genco Shipping and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, Salesforce 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 Salesforce will offset losses from the drop in Salesforce's long position.Genco Shipping vs. AP Mller | Genco Shipping vs. HAPAG LLOYD UNSPADR 12 | Genco Shipping vs. Hafnia Limited | Genco Shipping vs. Pacific Basin Shipping |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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