Correlation Between Loews Corp and WT Offshore
Can any of the company-specific risk be diversified away by investing in both Loews Corp 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 Loews Corp and WT Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loews Corp and WT Offshore, you can compare the effects of market volatilities on Loews Corp 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 Loews Corp with a short position of WT Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loews Corp and WT Offshore.
Diversification Opportunities for Loews Corp and WT Offshore
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Loews and WTI is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Loews Corp and WT Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT Offshore and Loews Corp 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 Loews Corp 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 Loews Corp i.e., Loews Corp and WT Offshore go up and down completely randomly.
Pair Corralation between Loews Corp and WT Offshore
Taking into account the 90-day investment horizon Loews Corp is expected to generate 0.32 times more return on investment than WT Offshore. However, Loews Corp is 3.17 times less risky than WT Offshore. It trades about 0.01 of its potential returns per unit of risk. WT Offshore is currently generating about -0.03 per unit of risk. If you would invest 8,601 in Loews Corp on October 23, 2024 and sell it today you would earn a total of 24.00 from holding Loews Corp or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loews Corp vs. WT Offshore
Performance |
| Timeline |
| Loews Corp |
| WT Offshore |
Loews Corp and WT Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loews Corp and WT Offshore
The main advantage of trading using opposite Loews Corp and WT Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loews Corp 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.| Loews Corp vs. Horace Mann Educators | Loews Corp vs. Global Indemnity PLC | Loews Corp vs. Selective Insurance Group | Loews Corp vs. Kemper |
| WT Offshore vs. Evolution Petroleum | WT Offshore vs. Ring Energy | WT Offshore vs. Gran Tierra Energy | WT Offshore vs. Permian Resources |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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