Correlation Between Fortescue Metals and WT OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Fortescue Metals and WT 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 Fortescue Metals and WT OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortescue Metals Group and WT OFFSHORE, you can compare the effects of market volatilities on Fortescue Metals and WT 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 Fortescue Metals with a short position of WT OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortescue Metals and WT OFFSHORE.
Diversification Opportunities for Fortescue Metals and WT OFFSHORE
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fortescue and UWV is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Fortescue Metals Group and WT OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT OFFSHORE and Fortescue Metals 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 Fortescue Metals Group are associated (or correlated) with WT OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT OFFSHORE has no effect on the direction of Fortescue Metals i.e., Fortescue Metals and WT OFFSHORE go up and down completely randomly.
Pair Corralation between Fortescue Metals and WT OFFSHORE
Assuming the 90 days horizon Fortescue Metals Group is expected to generate 0.64 times more return on investment than WT OFFSHORE. However, Fortescue Metals Group is 1.55 times less risky than WT OFFSHORE. It trades about 0.15 of its potential returns per unit of risk. WT OFFSHORE is currently generating about -0.03 per unit of risk. If you would invest 1,103 in Fortescue Metals Group on November 7, 2024 and sell it today you would earn a total of 57.00 from holding Fortescue Metals Group or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortescue Metals Group vs. WT OFFSHORE
Performance |
| Timeline |
| Fortescue Metals |
| WT OFFSHORE |
Fortescue Metals and WT OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortescue Metals and WT OFFSHORE
The main advantage of trading using opposite Fortescue Metals and WT OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortescue Metals position performs unexpectedly, WT 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 WT OFFSHORE will offset losses from the drop in WT OFFSHORE's long position.| Fortescue Metals vs. Transport International Holdings | Fortescue Metals vs. Broadcom | Fortescue Metals vs. NAGOYA RAILROAD | Fortescue Metals vs. VARIOUS EATERIES LS |
| WT OFFSHORE vs. Apple Inc | WT OFFSHORE vs. Apple Inc | WT OFFSHORE vs. Apple Inc | WT OFFSHORE vs. Apple Inc |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |