Correlation Between Global Ship and Genco Shipping

Can any of the company-specific risk be diversified away by investing in both Global Ship and Genco Shipping 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 Global Ship and Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Ship Lease and Genco Shipping Trading, you can compare the effects of market volatilities on Global Ship and Genco Shipping 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 Global Ship with a short position of Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Genco Shipping.

Diversification Opportunities for Global Ship and Genco Shipping

0.73

Correlation Coefficient

Global Ship  Genco Shipping

Poor diversification

The 3 months correlation between Global and Genco is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Genco Shipping Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genco Shipping Trading and Global Ship 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 Global Ship Lease are associated (or correlated) with Genco Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genco Shipping Trading has no effect on the direction of Global Ship i.e., Global Ship and Genco Shipping go up and down completely randomly.

Pair Corralation between Global Ship and Genco Shipping

Considering the 90-day investment horizon Global Ship Lease is expected to generate 0.89 times more return on investment than Genco Shipping. However, Global Ship Lease is 1.12 times less risky than Genco Shipping. It trades about 0.3 of its potential returns per unit of risk. Genco Shipping Trading is currently generating about 0.16 per unit of risk. If you would invest  2,100  in Global Ship Lease on May 6, 2025 and sell it today you would earn a total of  724.00  from holding Global Ship Lease or generate 34.48% return on investment over 90 days.

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

Global Ship Lease  vs.  Genco Shipping Trading

Global Ship Lease

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global Ship Lease are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Global Ship disclosed solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Global Ship and Genco Shipping

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

The idea behind Global Ship Lease and Genco Shipping Trading 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.