Correlation Between PT Wintermar and Moncler SpA

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

Diversification Opportunities for PT Wintermar and Moncler SpA

-0.15

Correlation Coefficient

PT Wintermar  Moncler SpA

Good diversification

The 3 months correlation between W6O and Moncler is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding PT Wintermar Offshore and Moncler SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moncler SpA 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 Moncler SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moncler SpA has no effect on the direction of PT Wintermar i.e., PT Wintermar and Moncler SpA go up and down completely randomly.

Pair Corralation between PT Wintermar and Moncler SpA

Assuming the 90 days horizon PT Wintermar Offshore is expected to under-perform the Moncler SpA. In addition to that, PT Wintermar is 2.45 times more volatile than Moncler SpA. It trades about -0.17 of its total potential returns per unit of risk. Moncler SpA is currently generating about 0.45 per unit of volatility. If you would invest  4,998  in Moncler SpA on October 23, 2024 and sell it today you would earn a total of  724.00  from holding Moncler SpA or generate 14.49% return on investment over 90 days.

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

PT Wintermar Offshore  vs.  Moncler SpA

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Moncler SpA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Moncler SpA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Moncler SpA may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with PT Wintermar and Moncler SpA

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

The idea behind PT Wintermar Offshore and Moncler SpA 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.

Check out your portfolio center.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.