Correlation Between Golden Ocean and Prosafe SE
Can any of the company-specific risk be diversified away by investing in both Golden Ocean and Prosafe SE 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 Prosafe SE 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 Prosafe SE, you can compare the effects of market volatilities on Golden Ocean and Prosafe SE 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 Prosafe SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Ocean and Prosafe SE.
Diversification Opportunities for Golden Ocean and Prosafe SE
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Golden and Prosafe is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Golden Ocean Group and Prosafe SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosafe SE 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 Prosafe SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosafe SE has no effect on the direction of Golden Ocean i.e., Golden Ocean and Prosafe SE go up and down completely randomly.
Pair Corralation between Golden Ocean and Prosafe SE
Assuming the 90 days trading horizon Golden Ocean Group is expected to under-perform the Prosafe SE. But the stock apears to be less risky and, when comparing its historical volatility, Golden Ocean Group is 3.35 times less risky than Prosafe SE. The stock trades about -0.04 of its potential returns per unit of risk. The Prosafe SE is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 699.00 in Prosafe SE on December 30, 2024 and sell it today you would earn a total of 81.00 from holding Prosafe SE or generate 11.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Golden Ocean Group vs. Prosafe SE
Performance |
Timeline |
Golden Ocean Group |
Prosafe SE |
Golden Ocean and Prosafe SE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Golden Ocean and Prosafe SE
The main advantage of trading using opposite Golden Ocean and Prosafe SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Ocean position performs unexpectedly, Prosafe SE 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 Prosafe SE will offset losses from the drop in Prosafe SE's long position.Golden Ocean vs. Frontline | Golden Ocean vs. BW LPG | Golden Ocean vs. Jinhui Shipping and | Golden Ocean vs. FLEX LNG |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
CEOs Directory Screen CEOs from public companies around the world | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
FinTech Suite Use AI to screen and filter profitable investment opportunities |