Correlation Between Marine Products and PTWOW Old

Can any of the company-specific risk be diversified away by investing in both Marine Products and PTWOW Old 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 Marine Products and PTWOW Old into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Marine Products and PTWOW Old

-0.16

Correlation Coefficient

Marine Products  PTWOW Old

Good diversification

The 3 months correlation between Marine and PTWOW is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products and PTWOW Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTWOW Old and Marine Products 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 Marine Products are associated (or correlated) with PTWOW Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTWOW Old has no effect on the direction of Marine Products i.e., Marine Products and PTWOW Old go up and down completely randomly.

Pair Corralation between Marine Products and PTWOW Old

Considering the 90-day investment horizon Marine Products is expected to under-perform the PTWOW Old. But the stock apears to be less risky and, when comparing its historical volatility, Marine Products is 45.36 times less risky than PTWOW Old. The stock trades about -0.01 of its potential returns per unit of risk. The PTWOW Old is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3.02  in PTWOW Old on October 11, 2024 and sell it today you would earn a total of  4.28  from holding PTWOW Old or generate 141.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	47.88%
Values	Daily Returns

Marine Products  vs.  PTWOW Old

Marine Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marine Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

PTWOW Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PTWOW Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, PTWOW Old is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Marine Products and PTWOW Old

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

The idea behind Marine Products and PTWOW Old 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.