Correlation Between Atea ASA and PT Wintermar

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

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

Diversification Opportunities for Atea ASA and PT Wintermar

-0.55

Correlation Coefficient

Atea ASA  PT Wintermar

Excellent diversification

The 3 months correlation between Atea and W6O is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Atea ASA and PT Wintermar Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Wintermar Offshore and Atea ASA 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 Atea ASA are associated (or correlated) with PT Wintermar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Wintermar Offshore has no effect on the direction of Atea ASA i.e., Atea ASA and PT Wintermar go up and down completely randomly.

Pair Corralation between Atea ASA and PT Wintermar

Assuming the 90 days horizon Atea ASA is expected to generate 1.36 times more return on investment than PT Wintermar. However, Atea ASA is 1.36 times more volatile than PT Wintermar Offshore. It trades about 0.11 of its potential returns per unit of risk. PT Wintermar Offshore is currently generating about -0.05 per unit of risk. If you would invest  861.00  in Atea ASA on October 24, 2024 and sell it today you would earn a total of  293.00  from holding Atea ASA or generate 34.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Atea ASA  vs.  PT Wintermar Offshore

Atea ASA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Atea ASA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Atea ASA reported solid returns over the last few months and may actually be approaching a breakup point.

PT Wintermar Offshore

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Wintermar Offshore has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Atea ASA and PT Wintermar

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

The idea behind Atea ASA and PT Wintermar Offshore 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.