Correlation Between Fast Food and Wintermar Offshore
Can any of the company-specific risk be diversified away by investing in both Fast Food and Wintermar Offshore 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 Fast Food and Wintermar Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fast Food Indonesia and Wintermar Offshore Marine, you can compare the effects of market volatilities on Fast Food and Wintermar Offshore 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 Fast Food with a short position of Wintermar Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fast Food and Wintermar Offshore.
Diversification Opportunities for Fast Food and Wintermar Offshore
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fast and Wintermar is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Fast Food Indonesia and Wintermar Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wintermar Offshore Marine and Fast Food 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 Fast Food Indonesia are associated (or correlated) with Wintermar Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wintermar Offshore Marine has no effect on the direction of Fast Food i.e., Fast Food and Wintermar Offshore go up and down completely randomly.
Pair Corralation between Fast Food and Wintermar Offshore
Assuming the 90 days trading horizon Fast Food Indonesia is expected to under-perform the Wintermar Offshore. But the stock apears to be less risky and, when comparing its historical volatility, Fast Food Indonesia is 1.4 times less risky than Wintermar Offshore. The stock trades about -0.08 of its potential returns per unit of risk. The Wintermar Offshore Marine is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 28,142 in Wintermar Offshore Marine on August 31, 2024 and sell it today you would earn a total of 19,058 from holding Wintermar Offshore Marine or generate 67.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Fast Food Indonesia vs. Wintermar Offshore Marine
Performance |
| Timeline |
| Fast Food Indonesia |
| Wintermar Offshore Marine |
Fast Food and Wintermar Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fast Food and Wintermar Offshore
The main advantage of trading using opposite Fast Food and Wintermar Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fast Food position performs unexpectedly, Wintermar Offshore 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 Wintermar Offshore will offset losses from the drop in Wintermar Offshore's long position.| Fast Food vs. Japfa Comfeed Indonesia | Fast Food vs. Charoen Pokphand Indonesia | Fast Food vs. Erajaya Swasembada Tbk | Fast Food vs. Indofood Cbp Sukses |
| Wintermar Offshore vs. Mitrabahtera Segara Sejati | Wintermar Offshore vs. Weha Transportasi Indonesia | Wintermar Offshore vs. Rig Tenders Tbk | Wintermar Offshore vs. Rukun Raharja Tbk |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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