Correlation Between PT Wintermar and BANK HANDLOWY

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

Diversification Opportunities for PT Wintermar and BANK HANDLOWY

0.15

Correlation Coefficient

PT Wintermar  BANK HANDLOWY

Average diversification

The 3 months correlation between W6O and BANK is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding PT Wintermar Offshore and BANK HANDLOWY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK HANDLOWY 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 BANK HANDLOWY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK HANDLOWY has no effect on the direction of PT Wintermar i.e., PT Wintermar and BANK HANDLOWY go up and down completely randomly.

Pair Corralation between PT Wintermar and BANK HANDLOWY

Assuming the 90 days horizon PT Wintermar Offshore is expected to generate 6.62 times more return on investment than BANK HANDLOWY. However, PT Wintermar is 6.62 times more volatile than BANK HANDLOWY. It trades about 0.03 of its potential returns per unit of risk. BANK HANDLOWY is currently generating about -0.06 per unit of risk. If you would invest  2.50  in PT Wintermar Offshore on September 24, 2024 and sell it today you would earn a total of  0.00  from holding PT Wintermar Offshore or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

PT Wintermar Offshore  vs.  BANK HANDLOWY

PT Wintermar Offshore

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Wintermar Offshore are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PT Wintermar may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BANK HANDLOWY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK HANDLOWY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BANK HANDLOWY is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with PT Wintermar and BANK HANDLOWY

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

The idea behind PT Wintermar Offshore and BANK HANDLOWY 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.