Correlation Between Golar LNG and PHLX Swiss
Can any of the company-specific risk be diversified away by investing in both Golar LNG and PHLX Swiss 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 Golar LNG and PHLX Swiss into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golar LNG Limited and PHLX Swiss Franc, you can compare the effects of market volatilities on Golar LNG and PHLX Swiss 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 Golar LNG with a short position of PHLX Swiss. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golar LNG and PHLX Swiss.
Diversification Opportunities for Golar LNG and PHLX Swiss
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Golar and PHLX is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Golar LNG Limited and PHLX Swiss Franc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHLX Swiss Franc and Golar LNG 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 Golar LNG Limited are associated (or correlated) with PHLX Swiss. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHLX Swiss Franc has no effect on the direction of Golar LNG i.e., Golar LNG and PHLX Swiss go up and down completely randomly.
Pair Corralation between Golar LNG and PHLX Swiss
Given the investment horizon of 90 days Golar LNG Limited is expected to generate 5.53 times more return on investment than PHLX Swiss. However, Golar LNG is 5.53 times more volatile than PHLX Swiss Franc. It trades about 0.16 of its potential returns per unit of risk. PHLX Swiss Franc is currently generating about -0.14 per unit of risk. If you would invest 3,556 in Golar LNG Limited on September 4, 2024 and sell it today you would earn a total of 409.00 from holding Golar LNG Limited or generate 11.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golar LNG Limited vs. PHLX Swiss Franc
Performance |
| Timeline |
Golar LNG and PHLX Swiss Volatility Contrast
Predicted Return Density |
| Returns |
Golar LNG Limited
Pair trading matchups for Golar LNG
PHLX Swiss Franc
Pair trading matchups for PHLX Swiss
Pair Trading with Golar LNG and PHLX Swiss
The main advantage of trading using opposite Golar LNG and PHLX Swiss positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golar LNG position performs unexpectedly, PHLX Swiss 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 PHLX Swiss will offset losses from the drop in PHLX Swiss' long position.| Golar LNG vs. EnLink Midstream LLC | Golar LNG vs. Western Midstream Partners | Golar LNG vs. Plains GP Holdings | Golar LNG vs. Hess Midstream Partners |
| PHLX Swiss vs. Air Products and | PHLX Swiss vs. Stepan Company | PHLX Swiss vs. Mativ Holdings | PHLX Swiss vs. JD Sports Fashion |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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