Correlation Between Safe Bulkers and Genesis Energy
Can any of the company-specific risk be diversified away by investing in both Safe Bulkers 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 Safe Bulkers and Genesis Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safe Bulkers and Genesis Energy LP, you can compare the effects of market volatilities on Safe Bulkers 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 Safe Bulkers with a short position of Genesis Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe Bulkers and Genesis Energy.
Diversification Opportunities for Safe Bulkers and Genesis Energy
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Safe and Genesis is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Safe Bulkers 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 Safe Bulkers 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 Safe Bulkers 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 Safe Bulkers i.e., Safe Bulkers and Genesis Energy go up and down completely randomly.
Pair Corralation between Safe Bulkers and Genesis Energy
Allowing for the 90-day total investment horizon Safe Bulkers is expected to generate 1.15 times more return on investment than Genesis Energy. However, Safe Bulkers is 1.15 times more volatile than Genesis Energy LP. It trades about -0.25 of its potential returns per unit of risk. Genesis Energy LP is currently generating about -0.33 per unit of risk. If you would invest 408.00 in Safe Bulkers on September 25, 2024 and sell it today you would lose (43.00) from holding Safe Bulkers or give up 10.54% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Safe Bulkers vs. Genesis Energy LP
Performance |
Timeline |
Safe Bulkers |
Genesis Energy LP |
Safe Bulkers and Genesis Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Safe Bulkers and Genesis Energy
The main advantage of trading using opposite Safe Bulkers and Genesis Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe Bulkers 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.Safe Bulkers vs. Pyxis Tankers | Safe Bulkers vs. Pacific Basin Shipping | Safe Bulkers vs. dAmico International Shipping | Safe Bulkers vs. Danaos |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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