Correlation Between Stolt Nielsen and Wallenius Wilhelmsen
Can any of the company-specific risk be diversified away by investing in both Stolt Nielsen and Wallenius Wilhelmsen 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 Stolt Nielsen and Wallenius Wilhelmsen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stolt Nielsen Limited and Wallenius Wilhelmsen Logistics, you can compare the effects of market volatilities on Stolt Nielsen and Wallenius Wilhelmsen 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 Stolt Nielsen with a short position of Wallenius Wilhelmsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stolt Nielsen and Wallenius Wilhelmsen.
Diversification Opportunities for Stolt Nielsen and Wallenius Wilhelmsen
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stolt and Wallenius is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Stolt Nielsen Limited and Wallenius Wilhelmsen Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wallenius Wilhelmsen and Stolt Nielsen 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 Stolt Nielsen Limited are associated (or correlated) with Wallenius Wilhelmsen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wallenius Wilhelmsen has no effect on the direction of Stolt Nielsen i.e., Stolt Nielsen and Wallenius Wilhelmsen go up and down completely randomly.
Pair Corralation between Stolt Nielsen and Wallenius Wilhelmsen
Assuming the 90 days trading horizon Stolt Nielsen Limited is expected to under-perform the Wallenius Wilhelmsen. But the stock apears to be less risky and, when comparing its historical volatility, Stolt Nielsen Limited is 1.51 times less risky than Wallenius Wilhelmsen. The stock trades about -0.12 of its potential returns per unit of risk. The Wallenius Wilhelmsen Logistics is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 10,440 in Wallenius Wilhelmsen Logistics on September 3, 2024 and sell it today you would earn a total of 310.00 from holding Wallenius Wilhelmsen Logistics or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stolt Nielsen Limited vs. Wallenius Wilhelmsen Logistics
Performance |
| Timeline |
| Stolt Nielsen Limited |
| Wallenius Wilhelmsen |
Stolt Nielsen and Wallenius Wilhelmsen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stolt Nielsen and Wallenius Wilhelmsen
The main advantage of trading using opposite Stolt Nielsen and Wallenius Wilhelmsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stolt Nielsen position performs unexpectedly, Wallenius Wilhelmsen 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 Wallenius Wilhelmsen will offset losses from the drop in Wallenius Wilhelmsen's long position.| Stolt Nielsen vs. SpareBank 1 stlandet | Stolt Nielsen vs. Xplora Technologies As | Stolt Nielsen vs. Nordic Mining ASA | Stolt Nielsen vs. Dolphin Drilling AS |
| Wallenius Wilhelmsen vs. Hoegh Autoliners ASA | Wallenius Wilhelmsen vs. Stolt Nielsen Limited | Wallenius Wilhelmsen vs. MPC Container Ships | Wallenius Wilhelmsen vs. Aker BP ASA |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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