Correlation Between Genco Shipping and Star Bulk

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

Diversification Opportunities for Genco Shipping and Star Bulk

0.55

Correlation Coefficient

Genco Shipping  Star Bulk

Very weak diversification

The 3 months correlation between Genco and Star is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and Star Bulk Carriers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Bulk Carriers 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 Star Bulk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Bulk Carriers has no effect on the direction of Genco Shipping i.e., Genco Shipping and Star Bulk go up and down completely randomly.

Pair Corralation between Genco Shipping and Star Bulk

Considering the 90-day investment horizon Genco Shipping is expected to generate 1.19 times less return on investment than Star Bulk. In addition to that, Genco Shipping is 1.1 times more volatile than Star Bulk Carriers. It trades about 0.16 of its total potential returns per unit of risk. Star Bulk Carriers is currently generating about 0.21 per unit of volatility. If you would invest  1,493  in Star Bulk Carriers on May 6, 2025 and sell it today you would earn a total of  349.00  from holding Star Bulk Carriers or generate 23.38% return on investment over 90 days.

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

Genco Shipping Trading  vs.  Star Bulk Carriers

Genco Shipping Trading

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Genco Shipping Trading are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Genco Shipping disclosed solid returns over the last few months and may actually be approaching a breakup point.

Star Bulk Carriers

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Star Bulk Carriers are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Star Bulk disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genco Shipping and Star Bulk

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

The idea behind Genco Shipping Trading and Star Bulk Carriers 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.