Correlation Between Golar LNG and Credit Suisse
Can any of the company-specific risk be diversified away by investing in both Golar LNG and Credit Suisse 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 Golar LNG and Credit Suisse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golar LNG Limited and Credit Suisse Group, you can compare the effects of market volatilities on Golar LNG and Credit Suisse 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 Golar LNG with a short position of Credit Suisse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golar LNG and Credit Suisse.
Diversification Opportunities for Golar LNG and Credit Suisse
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Golar and Credit is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Golar LNG Limited and Credit Suisse Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Group and Golar LNG 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 Golar LNG Limited are associated (or correlated) with Credit Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Suisse Group has no effect on the direction of Golar LNG i.e., Golar LNG and Credit Suisse go up and down completely randomly.
Pair Corralation between Golar LNG and Credit Suisse
Given the investment horizon of 90 days Golar LNG Limited is expected to generate 0.3 times more return on investment than Credit Suisse. However, Golar LNG Limited is 3.28 times less risky than Credit Suisse. It trades about 0.08 of its potential returns per unit of risk. Credit Suisse Group is currently generating about -0.15 per unit of risk. If you would invest 2,115 in Golar LNG Limited on September 6, 2024 and sell it today you would earn a total of 1,940 from holding Golar LNG Limited or generate 91.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 21.85% |
Values | Daily Returns |
Golar LNG Limited vs. Credit Suisse Group
Performance |
Timeline |
Golar LNG Limited |
Credit Suisse Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Golar LNG and Credit Suisse Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Golar LNG and Credit Suisse
The main advantage of trading using opposite Golar LNG and Credit Suisse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golar LNG position performs unexpectedly, Credit Suisse 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 Credit Suisse will offset losses from the drop in Credit Suisse's long position.Golar LNG vs. Teekay Tankers | Golar LNG vs. International Seaways | Golar LNG vs. Frontline | Golar LNG vs. DHT Holdings |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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