Correlation Between PT Wintermar and Westgold Resources
Can any of the company-specific risk be diversified away by investing in both PT Wintermar and Westgold Resources 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 PT Wintermar and Westgold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Wintermar Offshore and Westgold Resources, you can compare the effects of market volatilities on PT Wintermar and Westgold Resources 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 PT Wintermar with a short position of Westgold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Wintermar and Westgold Resources.
Diversification Opportunities for PT Wintermar and Westgold Resources
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between W6O and Westgold is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding PT Wintermar Offshore and Westgold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westgold Resources and PT Wintermar 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 PT Wintermar Offshore are associated (or correlated) with Westgold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westgold Resources has no effect on the direction of PT Wintermar i.e., PT Wintermar and Westgold Resources go up and down completely randomly.
Pair Corralation between PT Wintermar and Westgold Resources
Assuming the 90 days horizon PT Wintermar Offshore is expected to generate 3.83 times more return on investment than Westgold Resources. However, PT Wintermar is 3.83 times more volatile than Westgold Resources. It trades about 0.0 of its potential returns per unit of risk. Westgold Resources is currently generating about -0.16 per unit of risk. If you would invest 2.50 in PT Wintermar Offshore on November 4, 2024 and sell it today you would lose (0.40) from holding PT Wintermar Offshore or give up 16.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Wintermar Offshore vs. Westgold Resources
Performance |
| Timeline |
| PT Wintermar Offshore |
| Westgold Resources |
PT Wintermar and Westgold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Wintermar and Westgold Resources
The main advantage of trading using opposite PT Wintermar and Westgold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Wintermar position performs unexpectedly, Westgold Resources 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 Westgold Resources will offset losses from the drop in Westgold Resources' long position.| PT Wintermar vs. AP Mller | PT Wintermar vs. AP Mller | PT Wintermar vs. HAPAG LLOYD UNSPADR 12 | PT Wintermar vs. ZIM Integrated Shipping |
| Westgold Resources vs. ARDAGH METAL PACDL 0001 | Westgold Resources vs. De Grey Mining | Westgold Resources vs. USWE SPORTS AB | Westgold Resources vs. ANTA SPORTS PRODUCT |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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