Correlation Between Wintermar Offshore and PT MNC

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

Diversification Opportunities for Wintermar Offshore and PT MNC

-0.57

Correlation Coefficient

Wintermar Offshore  PT MNC

Excellent diversification

The 3 months correlation between Wintermar and IATA is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Wintermar Offshore Marine and PT MNC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT MNC Energy 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 PT MNC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT MNC Energy has no effect on the direction of Wintermar Offshore i.e., Wintermar Offshore and PT MNC go up and down completely randomly.

Pair Corralation between Wintermar Offshore and PT MNC

Assuming the 90 days trading horizon Wintermar Offshore Marine is expected to generate 1.03 times more return on investment than PT MNC. However, Wintermar Offshore is 1.03 times more volatile than PT MNC Energy. It trades about 0.04 of its potential returns per unit of risk. PT MNC Energy is currently generating about -0.03 per unit of risk. If you would invest  29,520  in Wintermar Offshore Marine on September 25, 2024 and sell it today you would earn a total of  14,880  from holding Wintermar Offshore Marine or generate 50.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.78%
Values	Daily Returns

Wintermar Offshore Marine  vs.  PT MNC Energy

Wintermar Offshore Marine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wintermar Offshore Marine has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Wintermar Offshore is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

PT MNC Energy

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PT MNC Energy are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT MNC disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wintermar Offshore and PT MNC

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

The idea behind Wintermar Offshore Marine and PT MNC Energy 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.