Correlation Between Golar LNG and Vaporbrands Intl
Can any of the company-specific risk be diversified away by investing in both Golar LNG and Vaporbrands Intl 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 Vaporbrands Intl 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 Vaporbrands Intl, you can compare the effects of market volatilities on Golar LNG and Vaporbrands Intl 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 Vaporbrands Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golar LNG and Vaporbrands Intl.
Diversification Opportunities for Golar LNG and Vaporbrands Intl
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Golar and Vaporbrands is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Golar LNG Limited and Vaporbrands Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaporbrands Intl 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 Vaporbrands Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaporbrands Intl has no effect on the direction of Golar LNG i.e., Golar LNG and Vaporbrands Intl go up and down completely randomly.
Pair Corralation between Golar LNG and Vaporbrands Intl
Given the investment horizon of 90 days Golar LNG Limited is expected to generate 0.23 times more return on investment than Vaporbrands Intl. However, Golar LNG Limited is 4.35 times less risky than Vaporbrands Intl. It trades about 0.1 of its potential returns per unit of risk. Vaporbrands Intl is currently generating about -0.01 per unit of risk. If you would invest 2,299 in Golar LNG Limited on September 4, 2024 and sell it today you would earn a total of 1,666 from holding Golar LNG Limited or generate 72.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golar LNG Limited vs. Vaporbrands Intl
Performance |
| Timeline |
| Golar LNG Limited |
| Vaporbrands Intl |
Golar LNG and Vaporbrands Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golar LNG and Vaporbrands Intl
The main advantage of trading using opposite Golar LNG and Vaporbrands Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golar LNG position performs unexpectedly, Vaporbrands Intl 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 Vaporbrands Intl will offset losses from the drop in Vaporbrands Intl's 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 |
| Vaporbrands Intl vs. Pyxus International | Vaporbrands Intl vs. 22nd Century Group | Vaporbrands Intl vs. Greenlane Holdings | Vaporbrands Intl vs. Japan Tobacco |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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