Correlation Between Golden Energy and Nordic Aqua

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

By analyzing existing cross correlation between Golden Energy Offshore and Nordic Aqua Partners, you can compare the effects of market volatilities on Golden Energy and Nordic Aqua 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 Energy with a short position of Nordic Aqua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Energy and Nordic Aqua.

Diversification Opportunities for Golden Energy and Nordic Aqua

-0.54

Correlation Coefficient

Golden Energy  Nordic Aqua

Excellent diversification

The 3 months correlation between Golden and Nordic is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Golden Energy Offshore and Nordic Aqua Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Aqua Partners and Golden Energy 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 Energy Offshore are associated (or correlated) with Nordic Aqua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Aqua Partners has no effect on the direction of Golden Energy i.e., Golden Energy and Nordic Aqua go up and down completely randomly.

Pair Corralation between Golden Energy and Nordic Aqua

Assuming the 90 days trading horizon Golden Energy Offshore is expected to generate 1.63 times more return on investment than Nordic Aqua. However, Golden Energy is 1.63 times more volatile than Nordic Aqua Partners. It trades about 0.09 of its potential returns per unit of risk. Nordic Aqua Partners is currently generating about -0.05 per unit of risk. If you would invest  1,685  in Golden Energy Offshore on April 24, 2025 and sell it today you would earn a total of  250.00  from holding Golden Energy Offshore or generate 14.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Golden Energy Offshore  vs.  Nordic Aqua Partners

Golden Energy Offshore

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Energy Offshore are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, Golden Energy disclosed solid returns over the last few months and may actually be approaching a breakup point.

Nordic Aqua Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nordic Aqua Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Nordic Aqua is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Golden Energy and Nordic Aqua

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

The idea behind Golden Energy Offshore and Nordic Aqua Partners 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.