Correlation Between PT Wintermar and NEXANS ADR
Can any of the company-specific risk be diversified away by investing in both PT Wintermar and NEXANS ADR 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 NEXANS ADR 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 NEXANS ADR EO, you can compare the effects of market volatilities on PT Wintermar and NEXANS ADR 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 NEXANS ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Wintermar and NEXANS ADR.
Diversification Opportunities for PT Wintermar and NEXANS ADR
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between W6O and NEXANS is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding PT Wintermar Offshore and NEXANS ADR EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXANS ADR EO 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 NEXANS ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXANS ADR EO has no effect on the direction of PT Wintermar i.e., PT Wintermar and NEXANS ADR go up and down completely randomly.
Pair Corralation between PT Wintermar and NEXANS ADR
Assuming the 90 days horizon PT Wintermar Offshore is expected to under-perform the NEXANS ADR. But the stock apears to be less risky and, when comparing its historical volatility, PT Wintermar Offshore is 1.09 times less risky than NEXANS ADR. The stock trades about -0.16 of its potential returns per unit of risk. The NEXANS ADR EO is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 5,800 in NEXANS ADR EO on October 10, 2024 and sell it today you would lose (700.00) from holding NEXANS ADR EO or give up 12.07% 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. NEXANS ADR EO
Performance |
| Timeline |
| PT Wintermar Offshore |
| NEXANS ADR EO |
PT Wintermar and NEXANS ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Wintermar and NEXANS ADR
The main advantage of trading using opposite PT Wintermar and NEXANS ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Wintermar position performs unexpectedly, NEXANS ADR 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 NEXANS ADR will offset losses from the drop in NEXANS ADR's long position.| PT Wintermar vs. Corporate Office Properties | PT Wintermar vs. Sumitomo Rubber Industries | PT Wintermar vs. VULCAN MATERIALS | PT Wintermar vs. Goodyear Tire Rubber |
| NEXANS ADR vs. Austevoll Seafood ASA | NEXANS ADR vs. PT Wintermar Offshore | NEXANS ADR vs. Astral Foods Limited | NEXANS ADR vs. YATRA ONLINE DL 0001 |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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