Correlation Between Genco Shipping and AP Mller

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

Diversification Opportunities for Genco Shipping and AP Mller

0.8

Correlation Coefficient

Genco Shipping  AP Mller

Very poor diversification

The 3 months correlation between Genco and DP4A is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Genco Shipping Trading and AP Mller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Mller 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 AP Mller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Mller has no effect on the direction of Genco Shipping i.e., Genco Shipping and AP Mller go up and down completely randomly.

Pair Corralation between Genco Shipping and AP Mller

Assuming the 90 days trading horizon Genco Shipping is expected to generate 1.02 times less return on investment than AP Mller. But when comparing it to its historical volatility, Genco Shipping Trading is 1.41 times less risky than AP Mller. It trades about 0.18 of its potential returns per unit of risk. AP Mller is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  142,800  in AP Mller on April 23, 2025 and sell it today you would earn a total of  28,600  from holding AP Mller or generate 20.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Genco Shipping Trading  vs.  AP Mller

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 13 (%) 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.

AP Mller

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AP Mller are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AP Mller reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Genco Shipping and AP Mller

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

The idea behind Genco Shipping Trading and AP Mller 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.