Correlation Between WT Offshore and Marine Products
Can any of the company-specific risk be diversified away by investing in both WT Offshore and Marine Products 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 WT Offshore and Marine Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WT Offshore and Marine Products, you can compare the effects of market volatilities on WT Offshore and Marine Products 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 WT Offshore with a short position of Marine Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of WT Offshore and Marine Products.
Diversification Opportunities for WT Offshore and Marine Products
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WTI and Marine is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding WT Offshore and Marine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Products and WT Offshore 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 WT Offshore are associated (or correlated) with Marine Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Products has no effect on the direction of WT Offshore i.e., WT Offshore and Marine Products go up and down completely randomly.
Pair Corralation between WT Offshore and Marine Products
Considering the 90-day investment horizon WT Offshore is expected to under-perform the Marine Products. In addition to that, WT Offshore is 1.16 times more volatile than Marine Products. It trades about -0.36 of its total potential returns per unit of risk. Marine Products is currently generating about -0.07 per unit of volatility. If you would invest 994.00 in Marine Products on September 13, 2024 and sell it today you would lose (26.00) from holding Marine Products or give up 2.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WT Offshore vs. Marine Products
Performance |
| Timeline |
| WT Offshore |
| Marine Products |
WT Offshore and Marine Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WT Offshore and Marine Products
The main advantage of trading using opposite WT Offshore and Marine Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WT Offshore position performs unexpectedly, Marine Products 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 Marine Products will offset losses from the drop in Marine Products' long position.| WT Offshore vs. Evolution Petroleum | WT Offshore vs. Ring Energy | WT Offshore vs. Gran Tierra Energy | WT Offshore vs. Permian Resources |
| Marine Products vs. Thor Industries | Marine Products vs. BRP Inc | Marine Products vs. Brunswick | Marine Products vs. EZGO Technologies |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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