Correlation Between Hapag Lloyd and Golden Ocean

Can any of the company-specific risk be diversified away by investing in both Hapag Lloyd and Golden Ocean 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 Hapag Lloyd and Golden Ocean into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hapag Lloyd Aktiengesellschaft and Golden Ocean Group, you can compare the effects of market volatilities on Hapag Lloyd and Golden Ocean 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 Hapag Lloyd with a short position of Golden Ocean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hapag Lloyd and Golden Ocean.

Diversification Opportunities for Hapag Lloyd and Golden Ocean

-0.05

Correlation Coefficient

Hapag Lloyd  Golden Ocean

Good diversification

The 3 months correlation between Hapag and Golden is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hapag Lloyd Aktiengesellschaft and Golden Ocean Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Ocean Group and Hapag Lloyd 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 Hapag Lloyd Aktiengesellschaft are associated (or correlated) with Golden Ocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Ocean Group has no effect on the direction of Hapag Lloyd i.e., Hapag Lloyd and Golden Ocean go up and down completely randomly.

Pair Corralation between Hapag Lloyd and Golden Ocean

Assuming the 90 days horizon Hapag Lloyd Aktiengesellschaft is expected to generate 1.17 times more return on investment than Golden Ocean. However, Hapag Lloyd is 1.17 times more volatile than Golden Ocean Group. It trades about -0.07 of its potential returns per unit of risk. Golden Ocean Group is currently generating about -0.62 per unit of risk. If you would invest  17,800  in Hapag Lloyd Aktiengesellschaft on September 16, 2024 and sell it today you would lose (734.00) from holding Hapag Lloyd Aktiengesellschaft or give up 4.12% of portfolio value over 90 days.

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

Hapag Lloyd Aktiengesellschaft  vs.  Golden Ocean Group

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 reported solid returns over the last few months and may actually be approaching a breakup point.

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 weak 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.

Pair Trading with Hapag Lloyd and Golden Ocean

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

The idea behind Hapag Lloyd Aktiengesellschaft and Golden Ocean Group 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.