Correlation Between PT Wintermar and National Bank

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

Diversification Opportunities for PT Wintermar and National Bank

-0.6

Correlation Coefficient

PT Wintermar  National Bank

Excellent diversification

The 3 months correlation between W6O and National is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding PT Wintermar Offshore and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of PT Wintermar i.e., PT Wintermar and National Bank go up and down completely randomly.

Pair Corralation between PT Wintermar and National Bank

Assuming the 90 days horizon PT Wintermar Offshore is expected to under-perform the National Bank. In addition to that, PT Wintermar is 4.24 times more volatile than National Bank of. It trades about -0.24 of its total potential returns per unit of risk. National Bank of is currently generating about 0.12 per unit of volatility. If you would invest  8,722  in National Bank of on October 10, 2024 and sell it today you would earn a total of  148.00  from holding National Bank of or generate 1.7% return on investment over 90 days.

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

PT Wintermar Offshore  vs.  National Bank of

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.

National Bank

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in National Bank of are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, National Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PT Wintermar and National Bank

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

The idea behind PT Wintermar Offshore and National Bank of 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.