Correlation Between Golden Ocean and Awilco LNG
Can any of the company-specific risk be diversified away by investing in both Golden Ocean and Awilco 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 Golden Ocean and Awilco LNG 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 Awilco LNG ASA, you can compare the effects of market volatilities on Golden Ocean and Awilco 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 Golden Ocean with a short position of Awilco LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Ocean and Awilco LNG.
Diversification Opportunities for Golden Ocean and Awilco LNG
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Golden and Awilco is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Golden Ocean Group and Awilco LNG ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awilco LNG ASA 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 Awilco LNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awilco LNG ASA has no effect on the direction of Golden Ocean i.e., Golden Ocean and Awilco LNG go up and down completely randomly.
Pair Corralation between Golden Ocean and Awilco LNG
Assuming the 90 days trading horizon Golden Ocean Group is expected to generate 0.43 times more return on investment than Awilco LNG. However, Golden Ocean Group is 2.32 times less risky than Awilco LNG. It trades about -0.09 of its potential returns per unit of risk. Awilco LNG ASA is currently generating about -0.18 per unit of risk. If you would invest 11,860 in Golden Ocean Group on September 1, 2024 and sell it today you would lose (770.00) from holding Golden Ocean Group or give up 6.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Ocean Group vs. Awilco LNG ASA
Performance |
| Timeline |
| Golden Ocean Group |
| Awilco LNG ASA |
Golden Ocean and Awilco LNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Ocean and Awilco LNG
The main advantage of trading using opposite Golden Ocean and Awilco LNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Ocean position performs unexpectedly, Awilco 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 Awilco LNG will offset losses from the drop in Awilco LNG's long position.| Golden Ocean vs. Frontline | Golden Ocean vs. BW LPG | Golden Ocean vs. FLEX LNG | Golden Ocean vs. Dampskibsselskabet Norden AS |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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