Correlation Between Dorian LPG and Avance Gas
Can any of the company-specific risk be diversified away by investing in both Dorian LPG and Avance Gas 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 Dorian LPG and Avance Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dorian LPG and Avance Gas Holding, you can compare the effects of market volatilities on Dorian LPG and Avance Gas 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 Dorian LPG with a short position of Avance Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dorian LPG and Avance Gas.
Diversification Opportunities for Dorian LPG and Avance Gas
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dorian and Avance is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Dorian LPG and Avance Gas Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avance Gas Holding and Dorian LPG 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 Dorian LPG are associated (or correlated) with Avance Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avance Gas Holding has no effect on the direction of Dorian LPG i.e., Dorian LPG and Avance Gas go up and down completely randomly.
Pair Corralation between Dorian LPG and Avance Gas
Considering the 90-day investment horizon Dorian LPG is expected to generate 1.79 times less return on investment than Avance Gas. But when comparing it to its historical volatility, Dorian LPG is 1.68 times less risky than Avance Gas. It trades about 0.12 of its potential returns per unit of risk. Avance Gas Holding is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 675.00 in Avance Gas Holding on October 24, 2024 and sell it today you would earn a total of 54.00 from holding Avance Gas Holding or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dorian LPG vs. Avance Gas Holding
Performance |
| Timeline |
| Dorian LPG |
| Avance Gas Holding |
Dorian LPG and Avance Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dorian LPG and Avance Gas
The main advantage of trading using opposite Dorian LPG and Avance Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dorian LPG position performs unexpectedly, Avance Gas 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 Avance Gas will offset losses from the drop in Avance Gas' long position.| Dorian LPG vs. DHT Holdings | Dorian LPG vs. Scorpio Tankers | Dorian LPG vs. Teekay Tankers | Dorian LPG vs. Torm PLC Class |
| Avance Gas vs. International Seaways | Avance Gas vs. Scorpio Tankers | Avance Gas vs. Dorian LPG | Avance Gas vs. Teekay Tankers |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |