Correlation Between Carsales and PT Wintermar

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Carsales and PT Wintermar 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 Carsales and PT Wintermar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarsalesCom and PT Wintermar Offshore, you can compare the effects of market volatilities on Carsales and PT Wintermar 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 Carsales with a short position of PT Wintermar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carsales and PT Wintermar.

Diversification Opportunities for Carsales and PT Wintermar

-0.41
  Correlation Coefficient

Very good diversification

The 3 months correlation between Carsales and W6O is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CarsalesCom and PT Wintermar Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Wintermar Offshore and Carsales 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 CarsalesCom are associated (or correlated) with PT Wintermar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Wintermar Offshore has no effect on the direction of Carsales i.e., Carsales and PT Wintermar go up and down completely randomly.

Pair Corralation between Carsales and PT Wintermar

Assuming the 90 days horizon CarsalesCom is expected to generate 0.37 times more return on investment than PT Wintermar. However, CarsalesCom is 2.69 times less risky than PT Wintermar. It trades about -0.07 of its potential returns per unit of risk. PT Wintermar Offshore is currently generating about -0.21 per unit of risk. If you would invest  2,340  in CarsalesCom on October 12, 2024 and sell it today you would lose (40.00) from holding CarsalesCom or give up 1.71% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

CarsalesCom  vs.  PT Wintermar Offshore

 Performance 
       Timeline  
CarsalesCom 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in CarsalesCom are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Carsales is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
PT Wintermar Offshore 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 unsteady 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.

Carsales and PT Wintermar Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Carsales and PT Wintermar

The main advantage of trading using opposite Carsales and PT Wintermar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carsales position performs unexpectedly, PT Wintermar 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 Wintermar will offset losses from the drop in PT Wintermar's long position.
The idea behind CarsalesCom and PT Wintermar Offshore 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

Other Complementary Tools

Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments