Correlation Between Kedawung Setia and Wintermar Offshore

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

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

Diversification Opportunities for Kedawung Setia and Wintermar Offshore

0.0

Correlation Coefficient

Kedawung Setia  Wintermar Offshore

Pay attention - limited upside

The 3 months correlation between Kedawung and Wintermar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kedawung Setia Industrial 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 Kedawung Setia 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 Kedawung Setia Industrial 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 Kedawung Setia i.e., Kedawung Setia and Wintermar Offshore go up and down completely randomly.

Pair Corralation between Kedawung Setia and Wintermar Offshore

Assuming the 90 days trading horizon Kedawung Setia Industrial is expected to generate 1.84 times more return on investment than Wintermar Offshore. However, Kedawung Setia is 1.84 times more volatile than Wintermar Offshore Marine. It trades about -0.02 of its potential returns per unit of risk. Wintermar Offshore Marine is currently generating about -0.12 per unit of risk. If you would invest  43,000  in Kedawung Setia Industrial on December 2, 2024 and sell it today you would lose (4,000) from holding Kedawung Setia Industrial or give up 9.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kedawung Setia Industrial  vs.  Wintermar Offshore Marine

Kedawung Setia Industrial

Risk-Adjusted Performance

Very Weak

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

Wintermar Offshore Marine

Risk-Adjusted Performance

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 conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Kedawung Setia and Wintermar Offshore

The main advantage of trading using opposite Kedawung Setia and Wintermar Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kedawung Setia 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 Kedawung Setia Industrial 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 Transaction History module to view history of all your transactions and understand their impact on performance.