Correlation Between Golden Energy and Sparebanken Ost

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

Diversification Opportunities for Golden Energy and Sparebanken Ost

0.72

Correlation Coefficient

Golden Energy  Sparebanken Ost

Poor diversification

The 3 months correlation between Golden and Sparebanken is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Golden Energy Offshore and Sparebanken Ost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebanken Ost 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 Sparebanken Ost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebanken Ost has no effect on the direction of Golden Energy i.e., Golden Energy and Sparebanken Ost go up and down completely randomly.

Pair Corralation between Golden Energy and Sparebanken Ost

Assuming the 90 days trading horizon Golden Energy Offshore is expected to generate 3.07 times more return on investment than Sparebanken Ost. However, Golden Energy is 3.07 times more volatile than Sparebanken Ost. It trades about 0.06 of its potential returns per unit of risk. Sparebanken Ost is currently generating about 0.05 per unit of risk. If you would invest  1,750  in Golden Energy Offshore on May 4, 2025 and sell it today you would earn a total of  145.00  from holding Golden Energy Offshore or generate 8.29% return on investment over 90 days.

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

Golden Energy Offshore  vs.  Sparebanken Ost

Golden Energy Offshore

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Energy Offshore are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, Golden Energy may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Sparebanken Ost

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sparebanken Ost are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Sparebanken Ost is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Golden Energy and Sparebanken Ost

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

The idea behind Golden Energy Offshore and Sparebanken Ost 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.