Correlation Between Wintermar Offshore and Arwana Citramulia
Can any of the company-specific risk be diversified away by investing in both Wintermar Offshore and Arwana Citramulia 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 Wintermar Offshore and Arwana Citramulia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wintermar Offshore Marine and Arwana Citramulia Tbk, you can compare the effects of market volatilities on Wintermar Offshore and Arwana Citramulia 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 Wintermar Offshore with a short position of Arwana Citramulia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintermar Offshore and Arwana Citramulia.
Diversification Opportunities for Wintermar Offshore and Arwana Citramulia
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wintermar and Arwana is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Wintermar Offshore Marine and Arwana Citramulia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arwana Citramulia Tbk and Wintermar 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 Wintermar Offshore Marine are associated (or correlated) with Arwana Citramulia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arwana Citramulia Tbk has no effect on the direction of Wintermar Offshore i.e., Wintermar Offshore and Arwana Citramulia go up and down completely randomly.
Pair Corralation between Wintermar Offshore and Arwana Citramulia
Assuming the 90 days trading horizon Wintermar Offshore Marine is expected to generate 2.39 times more return on investment than Arwana Citramulia. However, Wintermar Offshore is 2.39 times more volatile than Arwana Citramulia Tbk. It trades about 0.05 of its potential returns per unit of risk. Arwana Citramulia Tbk is currently generating about -0.03 per unit of risk. If you would invest 27,749 in Wintermar Offshore Marine on September 27, 2024 and sell it today you would earn a total of 16,851 from holding Wintermar Offshore Marine or generate 60.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.79% |
Values | Daily Returns |
Wintermar Offshore Marine vs. Arwana Citramulia Tbk
Performance |
Timeline |
Wintermar Offshore Marine |
Arwana Citramulia Tbk |
Wintermar Offshore and Arwana Citramulia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wintermar Offshore and Arwana Citramulia
The main advantage of trading using opposite Wintermar Offshore and Arwana Citramulia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintermar Offshore position performs unexpectedly, Arwana Citramulia 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 Arwana Citramulia will offset losses from the drop in Arwana Citramulia's long position.Wintermar Offshore vs. Perusahaan Gas Negara | Wintermar Offshore vs. Indo Tambangraya Megah | Wintermar Offshore vs. Aneka Tambang Persero |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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