Correlation Between Armada Hflr and PT Wintermar

Can any of the company-specific risk be diversified away by investing in both Armada Hflr 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 Armada Hflr and PT Wintermar into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Armada Hflr Pr and PT Wintermar Offshore, you can compare the effects of market volatilities on Armada Hflr 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 Armada Hflr with a short position of PT Wintermar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and PT Wintermar.

Diversification Opportunities for Armada Hflr and PT Wintermar

-0.12

Correlation Coefficient

Armada Hflr  PT Wintermar

Good diversification

The 3 months correlation between Armada and W6O is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr 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 Armada Hflr 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 Armada Hflr Pr 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 Armada Hflr i.e., Armada Hflr and PT Wintermar go up and down completely randomly.

Pair Corralation between Armada Hflr and PT Wintermar

Considering the 90-day investment horizon Armada Hflr is expected to generate 12.96 times less return on investment than PT Wintermar. But when comparing it to its historical volatility, Armada Hflr Pr is 6.81 times less risky than PT Wintermar. It trades about 0.02 of its potential returns per unit of risk. PT Wintermar Offshore is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3.10  in PT Wintermar Offshore on September 26, 2024 and sell it today you would lose (0.60) from holding PT Wintermar Offshore or give up 19.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.42%
Values	Daily Returns

Armada Hflr Pr  vs.  PT Wintermar Offshore

Armada Hflr Pr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Armada Hflr is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

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 nearly stable basic indicators, PT Wintermar is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Armada Hflr and PT Wintermar

The main advantage of trading using opposite Armada Hflr and PT Wintermar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr 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 Armada Hflr Pr 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.

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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.