Correlation Between Golden Ocean and Kirby
Can any of the company-specific risk be diversified away by investing in both Golden Ocean and Kirby 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 Kirby 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 Kirby, you can compare the effects of market volatilities on Golden Ocean and Kirby 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 Kirby. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Ocean and Kirby.
Diversification Opportunities for Golden Ocean and Kirby
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Golden and Kirby is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Golden Ocean Group and Kirby in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kirby 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 Kirby. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kirby has no effect on the direction of Golden Ocean i.e., Golden Ocean and Kirby go up and down completely randomly.
Pair Corralation between Golden Ocean and Kirby
Given the investment horizon of 90 days Golden Ocean Group is expected to generate 1.09 times more return on investment than Kirby. However, Golden Ocean is 1.09 times more volatile than Kirby. It trades about 0.08 of its potential returns per unit of risk. Kirby is currently generating about 0.06 per unit of risk. If you would invest 899.00 in Golden Ocean Group on November 9, 2024 and sell it today you would earn a total of 26.00 from holding Golden Ocean Group or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Ocean Group vs. Kirby
Performance |
| Timeline |
| Golden Ocean Group |
| Kirby |
Golden Ocean and Kirby Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Ocean and Kirby
The main advantage of trading using opposite Golden Ocean and Kirby positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Ocean position performs unexpectedly, Kirby 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 Kirby will offset losses from the drop in Kirby'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 |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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