Correlation Between Wintermar Offshore and Transcoal Pacific
Can any of the company-specific risk be diversified away by investing in both Wintermar Offshore and Transcoal Pacific 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 Transcoal Pacific 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 Transcoal Pacific Tbk, you can compare the effects of market volatilities on Wintermar Offshore and Transcoal Pacific 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 Transcoal Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintermar Offshore and Transcoal Pacific.
Diversification Opportunities for Wintermar Offshore and Transcoal Pacific
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wintermar and Transcoal is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Wintermar Offshore Marine and Transcoal Pacific Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcoal Pacific Tbk 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 Transcoal Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcoal Pacific Tbk has no effect on the direction of Wintermar Offshore i.e., Wintermar Offshore and Transcoal Pacific go up and down completely randomly.
Pair Corralation between Wintermar Offshore and Transcoal Pacific
Assuming the 90 days trading horizon Wintermar Offshore Marine is expected to generate 1.36 times more return on investment than Transcoal Pacific. However, Wintermar Offshore is 1.36 times more volatile than Transcoal Pacific Tbk. It trades about 0.0 of its potential returns per unit of risk. Transcoal Pacific Tbk is currently generating about -0.07 per unit of risk. If you would invest 45,264 in Wintermar Offshore Marine on September 26, 2024 and sell it today you would lose (864.00) from holding Wintermar Offshore Marine or give up 1.91% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Wintermar Offshore Marine vs. Transcoal Pacific Tbk
Performance |
Timeline |
Wintermar Offshore Marine |
Transcoal Pacific Tbk |
Wintermar Offshore and Transcoal Pacific Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wintermar Offshore and Transcoal Pacific
The main advantage of trading using opposite Wintermar Offshore and Transcoal Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintermar Offshore position performs unexpectedly, Transcoal Pacific 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 Transcoal Pacific will offset losses from the drop in Transcoal Pacific's long position.Wintermar Offshore vs. Perusahaan Gas Negara | Wintermar Offshore vs. Indo Tambangraya Megah | Wintermar Offshore vs. Aneka Tambang Persero |
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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..
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