Correlation Between Golden Ocean and Kawasaki Kisen

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

Diversification Opportunities for Golden Ocean and Kawasaki Kisen

0.7

Correlation Coefficient

Golden Ocean  Kawasaki Kisen

Poor diversification

The 3 months correlation between Golden and Kawasaki is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Golden Ocean Group and Kawasaki Kisen Kaisha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kawasaki Kisen Kaisha 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 Kawasaki Kisen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kawasaki Kisen Kaisha has no effect on the direction of Golden Ocean i.e., Golden Ocean and Kawasaki Kisen go up and down completely randomly.

Pair Corralation between Golden Ocean and Kawasaki Kisen

If you would invest  1,410  in Kawasaki Kisen Kaisha on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Kawasaki Kisen Kaisha or generate 0.0% return on investment over 90 days.

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

Golden Ocean Group  vs.  Kawasaki Kisen Kaisha

Golden Ocean Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Ocean Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Kawasaki Kisen Kaisha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kawasaki Kisen Kaisha has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking signals, Kawasaki Kisen is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Golden Ocean and Kawasaki Kisen

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

The idea behind Golden Ocean Group and Kawasaki Kisen Kaisha 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.