Correlation Between EURN Old and FLEX LNG
Can any of the company-specific risk be diversified away by investing in both EURN Old and FLEX LNG 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 EURN Old and FLEX LNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EURN Old and FLEX LNG, you can compare the effects of market volatilities on EURN Old and FLEX LNG 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 EURN Old with a short position of FLEX LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of EURN Old and FLEX LNG.
Diversification Opportunities for EURN Old and FLEX LNG
Good diversification
The 3 months correlation between EURN and FLEX is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding EURN Old and FLEX LNG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLEX LNG and EURN Old 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 EURN Old are associated (or correlated) with FLEX LNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLEX LNG has no effect on the direction of EURN Old i.e., EURN Old and FLEX LNG go up and down completely randomly.
Pair Corralation between EURN Old and FLEX LNG
Given the investment horizon of 90 days EURN Old is expected to generate 1.41 times more return on investment than FLEX LNG. However, EURN Old is 1.41 times more volatile than FLEX LNG. It trades about 0.08 of its potential returns per unit of risk. FLEX LNG is currently generating about 0.01 per unit of risk. If you would invest 970.00 in EURN Old on November 2, 2024 and sell it today you would earn a total of 661.00 from holding EURN Old or generate 68.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.06% |
| Values | Daily Returns |
EURN Old vs. FLEX LNG
Performance |
| Timeline |
| EURN Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| FLEX LNG |
EURN Old and FLEX LNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EURN Old and FLEX LNG
The main advantage of trading using opposite EURN Old and FLEX LNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EURN Old position performs unexpectedly, FLEX LNG 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 FLEX LNG will offset losses from the drop in FLEX LNG's long position.| EURN Old vs. Frontline | EURN Old vs. Teekay Tankers | EURN Old vs. Scorpio Tankers | EURN Old vs. DHT Holdings |
| FLEX LNG vs. Frontline | FLEX LNG vs. Torm PLC Class | FLEX LNG vs. Navigator Holdings | FLEX LNG vs. Teekay Tankers |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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