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
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Genco and Salesforce is 0.17. 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 Trading is expected to under-perform the Salesforce. But the stock apears to be less risky and, when comparing its historical volatility, Genco Shipping Trading is 1.05 times less risky than Salesforce. The stock trades about -0.1 of its potential returns per unit of risk. The Salesforce is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 22,439 in Salesforce on September 6, 2024 and sell it today you would earn a total of 11,826 from holding Salesforce or generate 52.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 99.22% |
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. Wilh Wilhelmsen Holding | Genco Shipping vs. Superior Plus Corp | Genco Shipping vs. NMI Holdings | Genco Shipping vs. Origin Agritech |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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