Correlation Between Golden Ocean and Hapag Lloyd

Can any of the company-specific risk be diversified away by investing in both Golden Ocean and Hapag Lloyd 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 Hapag Lloyd 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 Hapag Lloyd Aktiengesellschaft, you can compare the effects of market volatilities on Golden Ocean and Hapag Lloyd 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 Hapag Lloyd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Ocean and Hapag Lloyd.

Diversification Opportunities for Golden Ocean and Hapag Lloyd

-0.02

Correlation Coefficient

Golden Ocean  Hapag Lloyd

Good diversification

The 3 months correlation between Golden and Hapag is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Golden Ocean Group and Hapag Lloyd Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hapag Lloyd Aktienge 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 Hapag Lloyd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hapag Lloyd Aktienge has no effect on the direction of Golden Ocean i.e., Golden Ocean and Hapag Lloyd go up and down completely randomly.

Pair Corralation between Golden Ocean and Hapag Lloyd

Given the investment horizon of 90 days Golden Ocean Group is expected to under-perform the Hapag Lloyd. But the stock apears to be less risky and, when comparing its historical volatility, Golden Ocean Group is 1.16 times less risky than Hapag Lloyd. The stock trades about -0.6 of its potential returns per unit of risk. The Hapag Lloyd Aktiengesellschaft is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  17,500  in Hapag Lloyd Aktiengesellschaft on September 15, 2024 and sell it today you would lose (727.00) from holding Hapag Lloyd Aktiengesellschaft or give up 4.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Golden Ocean Group  vs.  Hapag Lloyd Aktiengesellschaft

Golden Ocean Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Ocean Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Hapag Lloyd Aktienge

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hapag Lloyd Aktiengesellschaft are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Hapag Lloyd may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Golden Ocean and Hapag Lloyd

The main advantage of trading using opposite Golden Ocean and Hapag Lloyd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Ocean position performs unexpectedly, Hapag Lloyd 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 Hapag Lloyd will offset losses from the drop in Hapag Lloyd's long position.

The idea behind Golden Ocean Group and Hapag Lloyd Aktiengesellschaft pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.