Correlation Between Globus Maritime and Genesis Energy
Can any of the company-specific risk be diversified away by investing in both Globus Maritime and Genesis Energy 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 Globus Maritime and Genesis Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globus Maritime and Genesis Energy LP, you can compare the effects of market volatilities on Globus Maritime and Genesis Energy 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 Globus Maritime with a short position of Genesis Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globus Maritime and Genesis Energy.
Diversification Opportunities for Globus Maritime and Genesis Energy
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Globus and Genesis is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Globus Maritime and Genesis Energy LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Energy LP and Globus Maritime 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 Globus Maritime are associated (or correlated) with Genesis Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Energy LP has no effect on the direction of Globus Maritime i.e., Globus Maritime and Genesis Energy go up and down completely randomly.
Pair Corralation between Globus Maritime and Genesis Energy
Given the investment horizon of 90 days Globus Maritime is expected to under-perform the Genesis Energy. In addition to that, Globus Maritime is 2.38 times more volatile than Genesis Energy LP. It trades about -0.24 of its total potential returns per unit of risk. Genesis Energy LP is currently generating about -0.33 per unit of volatility. If you would invest 1,174 in Genesis Energy LP on September 25, 2024 and sell it today you would lose (139.00) from holding Genesis Energy LP or give up 11.84% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Globus Maritime vs. Genesis Energy LP
Performance |
Timeline |
Globus Maritime |
Genesis Energy LP |
Globus Maritime and Genesis Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Globus Maritime and Genesis Energy
The main advantage of trading using opposite Globus Maritime and Genesis Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globus Maritime position performs unexpectedly, Genesis Energy 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 Genesis Energy will offset losses from the drop in Genesis Energy's long position.Globus Maritime vs. Seanergy Maritime Holdings | Globus Maritime vs. United Maritime | Globus Maritime vs. Performance Shipping | Globus Maritime vs. Castor Maritime |
Genesis Energy vs. United Maritime | Genesis Energy vs. Globus Maritime | Genesis Energy vs. Castor Maritime | Genesis Energy vs. Safe Bulkers |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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