Correlation Between PT Estee and Wintermar Offshore

Can any of the company-specific risk be diversified away by investing in both PT Estee and Wintermar Offshore 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 PT Estee and Wintermar Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT Estee Gold and Wintermar Offshore Marine, you can compare the effects of market volatilities on PT Estee and Wintermar Offshore 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 PT Estee with a short position of Wintermar Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Estee and Wintermar Offshore.

Diversification Opportunities for PT Estee and Wintermar Offshore

0.6

Correlation Coefficient

PT Estee  Wintermar Offshore

Poor diversification

The 3 months correlation between EURO and Wintermar is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding PT Estee Gold and Wintermar Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintermar Offshore Marine and PT Estee 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 PT Estee Gold are associated (or correlated) with Wintermar Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintermar Offshore Marine has no effect on the direction of PT Estee i.e., PT Estee and Wintermar Offshore go up and down completely randomly.

Pair Corralation between PT Estee and Wintermar Offshore

Assuming the 90 days trading horizon PT Estee Gold is expected to generate 2.84 times more return on investment than Wintermar Offshore. However, PT Estee is 2.84 times more volatile than Wintermar Offshore Marine. It trades about 0.07 of its potential returns per unit of risk. Wintermar Offshore Marine is currently generating about -0.13 per unit of risk. If you would invest  10,100  in PT Estee Gold on October 8, 2024 and sell it today you would earn a total of  500.00  from holding PT Estee Gold or generate 4.95% return on investment over 90 days.

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

PT Estee Gold  vs.  Wintermar Offshore Marine

PT Estee Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Estee Gold 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 forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Wintermar Offshore Marine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wintermar Offshore Marine has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with PT Estee and Wintermar Offshore

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

The idea behind PT Estee Gold and Wintermar Offshore Marine 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.