Correlation Between Golden Ocean and Eagle Bulk
Can any of the company-specific risk be diversified away by investing in both Golden Ocean and Eagle Bulk 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 Eagle Bulk 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 Eagle Bulk Shipping, you can compare the effects of market volatilities on Golden Ocean and Eagle Bulk 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 Eagle Bulk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Ocean and Eagle Bulk.
Diversification Opportunities for Golden Ocean and Eagle Bulk
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Golden and Eagle is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Golden Ocean Group and Eagle Bulk Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Bulk Shipping 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 Eagle Bulk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Bulk Shipping has no effect on the direction of Golden Ocean i.e., Golden Ocean and Eagle Bulk go up and down completely randomly.
Pair Corralation between Golden Ocean and Eagle Bulk
Given the investment horizon of 90 days Golden Ocean Group is expected to generate 0.89 times more return on investment than Eagle Bulk. However, Golden Ocean Group is 1.13 times less risky than Eagle Bulk. It trades about 0.05 of its potential returns per unit of risk. Eagle Bulk Shipping is currently generating about -0.02 per unit of risk. If you would invest 725.00 in Golden Ocean Group on August 23, 2024 and sell it today you would earn a total of 394.00 from holding Golden Ocean Group or generate 54.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 32.26% |
| Values | Daily Returns |
Golden Ocean Group vs. Eagle Bulk Shipping
Performance |
| Timeline |
| Golden Ocean Group |
| Eagle Bulk Shipping |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Golden Ocean and Eagle Bulk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Ocean and Eagle Bulk
The main advantage of trading using opposite Golden Ocean and Eagle Bulk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Ocean position performs unexpectedly, Eagle Bulk 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 Eagle Bulk will offset losses from the drop in Eagle Bulk's long position.| Golden Ocean vs. Genco Shipping Trading | Golden Ocean vs. Global Ship Lease | Golden Ocean vs. Diana Shipping | Golden Ocean vs. Star Bulk Carriers |
| Eagle Bulk vs. Star Bulk Carriers | Eagle Bulk vs. Golden Ocean Group | Eagle Bulk vs. Global Ship Lease | Eagle Bulk vs. Diana Shipping |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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