Correlation Between Golden Energy and SoftwareOne Holding

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

Diversification Opportunities for Golden Energy and SoftwareOne Holding

0.38

Correlation Coefficient

Golden Energy  SoftwareOne Holding

Weak diversification

The 3 months correlation between Golden and SoftwareOne is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Golden Energy Offshore and SoftwareOne Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoftwareOne Holding 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 SoftwareOne Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoftwareOne Holding has no effect on the direction of Golden Energy i.e., Golden Energy and SoftwareOne Holding go up and down completely randomly.

Pair Corralation between Golden Energy and SoftwareOne Holding

Assuming the 90 days trading horizon Golden Energy Offshore is expected to generate 1.04 times more return on investment than SoftwareOne Holding. However, Golden Energy is 1.04 times more volatile than SoftwareOne Holding. It trades about 0.09 of its potential returns per unit of risk. SoftwareOne Holding is currently generating about -0.12 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 Together
Strength	Very Weak
Accuracy	22.95%
Values	Daily Returns

Golden Energy Offshore  vs.  SoftwareOne Holding

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.

SoftwareOne Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days SoftwareOne Holding 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 essential indicators remain quite persistent which may send shares a bit higher in August 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Golden Energy and SoftwareOne Holding

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

The idea behind Golden Energy Offshore and SoftwareOne Holding 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.