Correlation Between WT OFFSHORE and Wilmar International

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Can any of the company-specific risk be diversified away by investing in both WT OFFSHORE and Wilmar International 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 WT OFFSHORE and Wilmar International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WT OFFSHORE and Wilmar International Limited, you can compare the effects of market volatilities on WT OFFSHORE and Wilmar International 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 WT OFFSHORE with a short position of Wilmar International. Check out your portfolio center. Please also check ongoing floating volatility patterns of WT OFFSHORE and Wilmar International.

Diversification Opportunities for WT OFFSHORE and Wilmar International

0.48
  Correlation Coefficient

Very weak diversification

The 3 months correlation between UWV and Wilmar is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding WT OFFSHORE and Wilmar International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar International and WT OFFSHORE 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 WT OFFSHORE are associated (or correlated) with Wilmar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar International has no effect on the direction of WT OFFSHORE i.e., WT OFFSHORE and Wilmar International go up and down completely randomly.

Pair Corralation between WT OFFSHORE and Wilmar International

Assuming the 90 days trading horizon WT OFFSHORE is expected to under-perform the Wilmar International. In addition to that, WT OFFSHORE is 2.32 times more volatile than Wilmar International Limited. It trades about -0.1 of its total potential returns per unit of risk. Wilmar International Limited is currently generating about 0.02 per unit of volatility. If you would invest  212.00  in Wilmar International Limited on September 22, 2024 and sell it today you would earn a total of  3.00  from holding Wilmar International Limited or generate 1.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

WT OFFSHORE  vs.  Wilmar International Limited

 Performance 
       Timeline  
WT OFFSHORE 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days WT OFFSHORE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Wilmar International 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Wilmar International Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, Wilmar International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

WT OFFSHORE and Wilmar International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with WT OFFSHORE and Wilmar International

The main advantage of trading using opposite WT OFFSHORE and Wilmar International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WT OFFSHORE position performs unexpectedly, Wilmar International 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 Wilmar International will offset losses from the drop in Wilmar International's long position.
The idea behind WT OFFSHORE and Wilmar International Limited 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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