Correlation Between Golden Ocean and Belships
Can any of the company-specific risk be diversified away by investing in both Golden Ocean and Belships 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 Golden Ocean and Belships into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Ocean Group and Belships, you can compare the effects of market volatilities on Golden Ocean and Belships 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 Golden Ocean with a short position of Belships. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Ocean and Belships.
Diversification Opportunities for Golden Ocean and Belships
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Golden and Belships is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Golden Ocean Group and Belships in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belships and Golden Ocean 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 Golden Ocean Group are associated (or correlated) with Belships. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belships has no effect on the direction of Golden Ocean i.e., Golden Ocean and Belships go up and down completely randomly.
Pair Corralation between Golden Ocean and Belships
Assuming the 90 days trading horizon Golden Ocean Group is expected to under-perform the Belships. In addition to that, Golden Ocean is 10.21 times more volatile than Belships. It trades about -0.1 of its total potential returns per unit of risk. Belships is currently generating about 0.04 per unit of volatility. If you would invest 2,020 in Belships on December 24, 2024 and sell it today you would earn a total of 15.00 from holding Belships or generate 0.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Golden Ocean Group vs. Belships
Performance |
Timeline |
Golden Ocean Group |
Belships |
Golden Ocean and Belships Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Golden Ocean and Belships
The main advantage of trading using opposite Golden Ocean and Belships positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Ocean position performs unexpectedly, Belships 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 Belships will offset losses from the drop in Belships' long position.Golden Ocean vs. Frontline | Golden Ocean vs. BW LPG | Golden Ocean vs. Jinhui Shipping and | Golden Ocean vs. FLEX LNG |
Belships vs. Techstep ASA | Belships vs. Nordic Semiconductor ASA | Belships vs. Cloudberry Clean Energy | Belships vs. Thor Medical ASA |
Check out your portfolio center.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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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