Correlation Between Dno ASA and Golden Ocean

Can any of the company-specific risk be diversified away by investing in both Dno ASA and Golden Ocean 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 Dno ASA and Golden Ocean into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dno ASA and Golden Ocean Group, you can compare the effects of market volatilities on Dno ASA and Golden Ocean 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 Dno ASA with a short position of Golden Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dno ASA and Golden Ocean.

Diversification Opportunities for Dno ASA and Golden Ocean

-0.09

Correlation Coefficient

Dno ASA  Golden Ocean

Good diversification

The 3 months correlation between Dno and Golden is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dno ASA and Golden Ocean Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Ocean Group and Dno ASA 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 Dno ASA are associated (or correlated) with Golden Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Ocean Group has no effect on the direction of Dno ASA i.e., Dno ASA and Golden Ocean go up and down completely randomly.

Pair Corralation between Dno ASA and Golden Ocean

Assuming the 90 days trading horizon Dno ASA is expected to generate 1.25 times more return on investment than Golden Ocean. However, Dno ASA is 1.25 times more volatile than Golden Ocean Group. It trades about 0.15 of its potential returns per unit of risk. Golden Ocean Group is currently generating about 0.04 per unit of risk. If you would invest  1,001  in Dno ASA on December 2, 2024 and sell it today you would earn a total of  236.00  from holding Dno ASA or generate 23.58% return on investment over 90 days.

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

Dno ASA  vs.  Golden Ocean Group

Dno ASA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dno ASA are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Dno ASA disclosed solid returns over the last few months and may actually be approaching a breakup point.

Golden Ocean Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Ocean Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Golden Ocean is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Dno ASA and Golden Ocean

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

The idea behind Dno ASA and Golden Ocean Group 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 CEOs Directory module to screen CEOs from public companies around the world.