Correlation Between Castor Maritime and Golden Ocean

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

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

Diversification Opportunities for Castor Maritime and Golden Ocean

-0.46

Correlation Coefficient

Castor Maritime  Golden Ocean

Very good diversification

The 3 months correlation between Castor and Golden is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Castor Maritime 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 Castor Maritime 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 Castor Maritime 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 Castor Maritime i.e., Castor Maritime and Golden Ocean go up and down completely randomly.

Pair Corralation between Castor Maritime and Golden Ocean

Given the investment horizon of 90 days Castor Maritime is expected to under-perform the Golden Ocean. In addition to that, Castor Maritime is 1.5 times more volatile than Golden Ocean Group. It trades about -0.03 of its total potential returns per unit of risk. Golden Ocean Group is currently generating about 0.14 per unit of volatility. If you would invest  1,163  in Golden Ocean Group on February 23, 2024 and sell it today you would earn a total of  252.00  from holding Golden Ocean Group or generate 21.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Castor Maritime  vs.  Golden Ocean Group

Castor Maritime

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Castor Maritime has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Golden Ocean Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Ocean Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady technical and fundamental indicators, Golden Ocean disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Castor Maritime and Golden Ocean

The main advantage of trading using opposite Castor Maritime and Golden Ocean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castor Maritime 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 Castor Maritime 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.