Correlation Between Genco Shipping and WIZZ AIR

Can any of the company-specific risk be diversified away by investing in both Genco Shipping and WIZZ AIR 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 WIZZ AIR 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 WIZZ AIR HLDGUNSPADR4, you can compare the effects of market volatilities on Genco Shipping and WIZZ AIR 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 WIZZ AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genco Shipping and WIZZ AIR.

Diversification Opportunities for Genco Shipping and WIZZ AIR

0.33

Correlation Coefficient

Genco Shipping  WIZZ AIR

Weak diversification

The 3 months correlation between Genco and WIZZ is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and WIZZ AIR HLDGUNSPADR4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIZZ AIR HLDGUNSPADR4 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 WIZZ AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIZZ AIR HLDGUNSPADR4 has no effect on the direction of Genco Shipping i.e., Genco Shipping and WIZZ AIR go up and down completely randomly.

Pair Corralation between Genco Shipping and WIZZ AIR

Assuming the 90 days trading horizon Genco Shipping Trading is expected to generate 0.76 times more return on investment than WIZZ AIR. However, Genco Shipping Trading is 1.31 times less risky than WIZZ AIR. It trades about 0.03 of its potential returns per unit of risk. WIZZ AIR HLDGUNSPADR4 is currently generating about -0.01 per unit of risk. If you would invest  1,153  in Genco Shipping Trading on September 3, 2024 and sell it today you would earn a total of  351.00  from holding Genco Shipping Trading or generate 30.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Genco Shipping Trading  vs.  WIZZ AIR HLDGUNSPADR4

Genco Shipping Trading

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genco Shipping Trading has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Genco Shipping is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

WIZZ AIR HLDGUNSPADR4

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in WIZZ AIR HLDGUNSPADR4 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, WIZZ AIR is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Genco Shipping and WIZZ AIR

The main advantage of trading using opposite Genco Shipping and WIZZ AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genco Shipping position performs unexpectedly, WIZZ AIR 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 WIZZ AIR will offset losses from the drop in WIZZ AIR's long position.

The idea behind Genco Shipping Trading and WIZZ AIR HLDGUNSPADR4 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.