Correlation Between Golden Ocean and Kirby

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

Diversification Opportunities for Golden Ocean and Kirby

0.43

Correlation Coefficient

Golden Ocean  Kirby

Very weak diversification

The 3 months correlation between Golden and Kirby is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Golden Ocean Group and Kirby in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kirby 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 Kirby. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kirby has no effect on the direction of Golden Ocean i.e., Golden Ocean and Kirby go up and down completely randomly.

Pair Corralation between Golden Ocean and Kirby

Given the investment horizon of 90 days Golden Ocean Group is expected to under-perform the Kirby. In addition to that, Golden Ocean is 1.88 times more volatile than Kirby. It trades about -0.02 of its total potential returns per unit of risk. Kirby is currently generating about -0.02 per unit of volatility. If you would invest  10,598  in Kirby on December 27, 2024 and sell it today you would lose (309.00) from holding Kirby or give up 2.92% of portfolio value over 90 days.

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

Golden Ocean Group  vs.  Kirby

Golden Ocean Group

Risk-Adjusted Performance

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 quite persistent technical and fundamental 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.

Kirby

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kirby has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Kirby is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Golden Ocean and Kirby

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

The idea behind Golden Ocean Group and Kirby 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.