Correlation Between Advanced Medical and Genco Shipping

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

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

Diversification Opportunities for Advanced Medical and Genco Shipping

0.15

Correlation Coefficient

Advanced Medical  Genco Shipping

Average diversification

The 3 months correlation between Advanced and Genco is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions 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 Advanced Medical 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 Advanced Medical Solutions 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 Advanced Medical i.e., Advanced Medical and Genco Shipping go up and down completely randomly.

Pair Corralation between Advanced Medical and Genco Shipping

Assuming the 90 days trading horizon Advanced Medical is expected to generate 1.3 times less return on investment than Genco Shipping. In addition to that, Advanced Medical is 1.45 times more volatile than Genco Shipping Trading. It trades about 0.08 of its total potential returns per unit of risk. Genco Shipping Trading is currently generating about 0.15 per unit of volatility. If you would invest  1,094  in Genco Shipping Trading on April 24, 2025 and sell it today you would earn a total of  187.00  from holding Genco Shipping Trading or generate 17.09% return on investment over 90 days.

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

Advanced Medical Solutions  vs.  Genco Shipping Trading

Advanced Medical Sol

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Medical Solutions are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Advanced Medical unveiled 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 nearly fragile basic indicators, Genco Shipping reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advanced Medical and Genco Shipping

The main advantage of trading using opposite Advanced Medical and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Medical 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 Advanced Medical Solutions 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.