Correlation Between Clarkson PLC and AWILCO LNG
Can any of the company-specific risk be diversified away by investing in both Clarkson PLC and AWILCO LNG 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 Clarkson PLC and AWILCO LNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clarkson PLC and AWILCO LNG NK, you can compare the effects of market volatilities on Clarkson PLC and AWILCO LNG 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 Clarkson PLC with a short position of AWILCO LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clarkson PLC and AWILCO LNG.
Diversification Opportunities for Clarkson PLC and AWILCO LNG
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Clarkson and AWILCO is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Clarkson PLC and AWILCO LNG NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AWILCO LNG NK and Clarkson PLC 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 Clarkson PLC are associated (or correlated) with AWILCO LNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AWILCO LNG NK has no effect on the direction of Clarkson PLC i.e., Clarkson PLC and AWILCO LNG go up and down completely randomly.
Pair Corralation between Clarkson PLC and AWILCO LNG
Assuming the 90 days horizon Clarkson PLC is expected to generate 2.05 times less return on investment than AWILCO LNG. But when comparing it to its historical volatility, Clarkson PLC is 3.23 times less risky than AWILCO LNG. It trades about 0.19 of its potential returns per unit of risk. AWILCO LNG NK is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 31.00 in AWILCO LNG NK on October 20, 2024 and sell it today you would earn a total of 4.00 from holding AWILCO LNG NK or generate 12.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clarkson PLC vs. AWILCO LNG NK
Performance |
| Timeline |
| Clarkson PLC |
| AWILCO LNG NK |
Clarkson PLC and AWILCO LNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clarkson PLC and AWILCO LNG
The main advantage of trading using opposite Clarkson PLC and AWILCO LNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clarkson PLC position performs unexpectedly, AWILCO LNG 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 AWILCO LNG will offset losses from the drop in AWILCO LNG's long position.| Clarkson PLC vs. AP Mller | Clarkson PLC vs. HAPAG LLOYD UNSPADR 12 | Clarkson PLC vs. ZIM Integrated Shipping | Clarkson PLC vs. DFDS AS |
| AWILCO LNG vs. Perdoceo Education | AWILCO LNG vs. Penta Ocean Construction Co | AWILCO LNG vs. AGRICULTBK HADR25 YC | AWILCO LNG vs. Granite Construction |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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