Correlation Between Wintermar Offshore and Jasa Armada

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

Diversification Opportunities for Wintermar Offshore and Jasa Armada

0.08

Correlation Coefficient

Wintermar Offshore  Jasa Armada

Significant diversification

The 3 months correlation between Wintermar and Jasa is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Wintermar Offshore Marine and Jasa Armada Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasa Armada Indonesia 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 Jasa Armada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasa Armada Indonesia has no effect on the direction of Wintermar Offshore i.e., Wintermar Offshore and Jasa Armada go up and down completely randomly.

Pair Corralation between Wintermar Offshore and Jasa Armada

Assuming the 90 days trading horizon Wintermar Offshore Marine is not expected to generate positive returns. Moreover, Wintermar Offshore is 3.65 times more volatile than Jasa Armada Indonesia. It trades away all of its potential returns to assume current level of volatility. Jasa Armada Indonesia is currently generating about 0.02 per unit of risk. If you would invest  26,223  in Jasa Armada Indonesia on September 29, 2024 and sell it today you would earn a total of  377.00  from holding Jasa Armada Indonesia or generate 1.44% return on investment over 90 days.

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

Wintermar Offshore Marine  vs.  Jasa Armada Indonesia

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.

Jasa Armada Indonesia

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Wintermar Offshore and Jasa Armada

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

The idea behind Wintermar Offshore Marine and Jasa Armada Indonesia 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..