Correlation Between Golden Ocean and Saga Pure
Can any of the company-specific risk be diversified away by investing in both Golden Ocean and Saga Pure 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 Saga Pure 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 Saga Pure ASA, you can compare the effects of market volatilities on Golden Ocean and Saga Pure 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 Saga Pure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Ocean and Saga Pure.
Diversification Opportunities for Golden Ocean and Saga Pure
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Golden and Saga is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Golden Ocean Group and Saga Pure ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saga Pure 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 Saga Pure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saga Pure ASA has no effect on the direction of Golden Ocean i.e., Golden Ocean and Saga Pure go up and down completely randomly.
Pair Corralation between Golden Ocean and Saga Pure
Assuming the 90 days trading horizon Golden Ocean Group is expected to generate 2.69 times more return on investment than Saga Pure. However, Golden Ocean is 2.69 times more volatile than Saga Pure ASA. It trades about 0.01 of its potential returns per unit of risk. Saga Pure ASA is currently generating about -0.07 per unit of risk. If you would invest 10,534 in Golden Ocean Group on November 4, 2024 and sell it today you would lose (4.00) from holding Golden Ocean Group or give up 0.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Ocean Group vs. Saga Pure ASA
Performance |
| Timeline |
| Golden Ocean Group |
| Saga Pure ASA |
Golden Ocean and Saga Pure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Ocean and Saga Pure
The main advantage of trading using opposite Golden Ocean and Saga Pure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Ocean position performs unexpectedly, Saga Pure 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 Saga Pure will offset losses from the drop in Saga Pure's long position.| Golden Ocean vs. Frontline | Golden Ocean vs. BW LPG | Golden Ocean vs. Jinhui Shipping and | Golden Ocean vs. FLEX LNG |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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