Correlation Between Golden Ocean and TOP Ships
Can any of the company-specific risk be diversified away by investing in both Golden Ocean and TOP Ships 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 TOP Ships 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 TOP Ships, you can compare the effects of market volatilities on Golden Ocean and TOP Ships 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 TOP Ships. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Ocean and TOP Ships.
Diversification Opportunities for Golden Ocean and TOP Ships
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Golden and TOP is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Golden Ocean Group and TOP Ships in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOP Ships 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 TOP Ships. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOP Ships has no effect on the direction of Golden Ocean i.e., Golden Ocean and TOP Ships go up and down completely randomly.
Pair Corralation between Golden Ocean and TOP Ships
Given the investment horizon of 90 days Golden Ocean Group is expected to generate 0.86 times more return on investment than TOP Ships. However, Golden Ocean Group is 1.17 times less risky than TOP Ships. It trades about 0.1 of its potential returns per unit of risk. TOP Ships is currently generating about -0.16 per unit of risk. If you would invest 1,062 in Golden Ocean Group on August 28, 2024 and sell it today you would earn a total of 46.00 from holding Golden Ocean Group or generate 4.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Ocean Group vs. TOP Ships
Performance |
| Timeline |
| Golden Ocean Group |
| TOP Ships |
Golden Ocean and TOP Ships Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Ocean and TOP Ships
The main advantage of trading using opposite Golden Ocean and TOP Ships positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Ocean position performs unexpectedly, TOP Ships 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 TOP Ships will offset losses from the drop in TOP Ships' 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 |
| TOP Ships vs. United Maritime | TOP Ships vs. Globus Maritime | TOP Ships vs. Castor Maritime | TOP Ships vs. Safe Bulkers |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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