Correlation Between AP Mller and PT Wintermar
Can any of the company-specific risk be diversified away by investing in both AP Mller and PT Wintermar 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 AP Mller and PT Wintermar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Mller and PT Wintermar Offshore, you can compare the effects of market volatilities on AP Mller and PT Wintermar 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 AP Mller with a short position of PT Wintermar. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Mller and PT Wintermar.
Diversification Opportunities for AP Mller and PT Wintermar
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DP4A and W6O is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding AP Mller and PT Wintermar Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Wintermar Offshore and AP Mller 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 AP Mller are associated (or correlated) with PT Wintermar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Wintermar Offshore has no effect on the direction of AP Mller i.e., AP Mller and PT Wintermar go up and down completely randomly.
Pair Corralation between AP Mller and PT Wintermar
Assuming the 90 days trading horizon AP Mller is expected to generate 0.18 times more return on investment than PT Wintermar. However, AP Mller is 5.44 times less risky than PT Wintermar. It trades about -0.35 of its potential returns per unit of risk. PT Wintermar Offshore is currently generating about -0.07 per unit of risk. If you would invest 159,700 in AP Mller on November 6, 2024 and sell it today you would lose (23,500) from holding AP Mller or give up 14.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AP Mller vs. PT Wintermar Offshore
Performance |
| Timeline |
| AP Mller |
| PT Wintermar Offshore |
AP Mller and PT Wintermar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Mller and PT Wintermar
The main advantage of trading using opposite AP Mller and PT Wintermar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Mller position performs unexpectedly, PT Wintermar 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 Wintermar will offset losses from the drop in PT Wintermar's long position.| AP Mller vs. The Hanover Insurance | AP Mller vs. LIFENET INSURANCE CO | AP Mller vs. X FAB Silicon Foundries | AP Mller vs. Wayside Technology Group |
| PT Wintermar vs. ALERION CLEANPOWER | PT Wintermar vs. G8 EDUCATION | PT Wintermar vs. CARSALESCOM | PT Wintermar vs. CLEAN ENERGY FUELS |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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