Correlation Between PT Wintermar and Linde Plc

Can any of the company-specific risk be diversified away by investing in both PT Wintermar and Linde Plc 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 Linde Plc 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 Linde plc, you can compare the effects of market volatilities on PT Wintermar and Linde Plc 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 Linde Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Wintermar and Linde Plc.

Diversification Opportunities for PT Wintermar and Linde Plc

0.23

Correlation Coefficient

PT Wintermar  Linde Plc

Modest diversification

The 3 months correlation between W6O and Linde is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding PT Wintermar Offshore and Linde plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linde plc 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 Linde Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linde plc has no effect on the direction of PT Wintermar i.e., PT Wintermar and Linde Plc go up and down completely randomly.

Pair Corralation between PT Wintermar and Linde Plc

Assuming the 90 days horizon PT Wintermar Offshore is expected to generate 7.61 times more return on investment than Linde Plc. However, PT Wintermar is 7.61 times more volatile than Linde plc. It trades about 0.02 of its potential returns per unit of risk. Linde plc is currently generating about -0.47 per unit of risk. If you would invest  2.50  in PT Wintermar Offshore on October 9, 2024 and sell it today you would earn a total of  0.00  from holding PT Wintermar Offshore or generate 0.0% return on investment over 90 days.

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

PT Wintermar Offshore  vs.  Linde plc

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.

Linde plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Linde plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with PT Wintermar and Linde Plc

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

The idea behind PT Wintermar Offshore and Linde plc 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..