Correlation Between PT Wintermar and PT Bank

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

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

Diversification Opportunities for PT Wintermar and PT Bank

0.76

Correlation Coefficient

PT Wintermar  PT Bank

Poor diversification

The 3 months correlation between W6O and BZG2 is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding PT Wintermar Offshore and PT Bank Central in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Central and PT Wintermar 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 Wintermar Offshore are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Central has no effect on the direction of PT Wintermar i.e., PT Wintermar and PT Bank go up and down completely randomly.

Pair Corralation between PT Wintermar and PT Bank

Assuming the 90 days horizon PT Wintermar Offshore is expected to generate 2.48 times more return on investment than PT Bank. However, PT Wintermar is 2.48 times more volatile than PT Bank Central. It trades about -0.02 of its potential returns per unit of risk. PT Bank Central is currently generating about -0.04 per unit of risk. If you would invest  2.50  in PT Wintermar Offshore on December 19, 2024 and sell it today you would lose (0.90) from holding PT Wintermar Offshore or give up 36.0% of portfolio value over 90 days.

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

PT Wintermar Offshore  vs.  PT Bank Central

PT Wintermar Offshore

Risk-Adjusted Performance

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.

PT Bank Central

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Bank Central has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental 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 PT Wintermar and PT Bank

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

The idea behind PT Wintermar Offshore and PT Bank Central 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.