Correlation Between Alexander Baldwin and Frontline

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

By analyzing existing cross correlation between Alexander Baldwin Holdings and Frontline, you can compare the effects of market volatilities on Alexander Baldwin and Frontline 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 Alexander Baldwin with a short position of Frontline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alexander Baldwin and Frontline.

Diversification Opportunities for Alexander Baldwin and Frontline

-0.38

Correlation Coefficient

Alexander Baldwin  Frontline

Very good diversification

The 3 months correlation between Alexander and Frontline is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Alexander Baldwin Holdings and Frontline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontline and Alexander Baldwin 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 Alexander Baldwin Holdings are associated (or correlated) with Frontline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontline has no effect on the direction of Alexander Baldwin i.e., Alexander Baldwin and Frontline go up and down completely randomly.

Pair Corralation between Alexander Baldwin and Frontline

Given the investment horizon of 90 days Alexander Baldwin Holdings is expected to generate 0.31 times more return on investment than Frontline. However, Alexander Baldwin Holdings is 3.19 times less risky than Frontline. It trades about 0.04 of its potential returns per unit of risk. Frontline is currently generating about -0.13 per unit of risk. If you would invest  1,913  in Alexander Baldwin Holdings on September 5, 2024 and sell it today you would earn a total of  43.00  from holding Alexander Baldwin Holdings or generate 2.25% return on investment over 90 days.

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

Alexander Baldwin Holdings  vs.  Frontline

Alexander Baldwin

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alexander Baldwin Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Alexander Baldwin is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Frontline

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Frontline has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Alexander Baldwin and Frontline

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

The idea behind Alexander Baldwin Holdings and Frontline 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..