Correlation Between Wilh Wilhelmsen and American Shipping
Can any of the company-specific risk be diversified away by investing in both Wilh Wilhelmsen and American Shipping 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 Wilh Wilhelmsen and American Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wilh Wilhelmsen Holding and American Shipping, you can compare the effects of market volatilities on Wilh Wilhelmsen and American Shipping 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 Wilh Wilhelmsen with a short position of American Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilh Wilhelmsen and American Shipping.
Diversification Opportunities for Wilh Wilhelmsen and American Shipping
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wilh and American is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Wilh Wilhelmsen Holding and American Shipping in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shipping and Wilh Wilhelmsen 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 Wilh Wilhelmsen Holding are associated (or correlated) with American Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Shipping has no effect on the direction of Wilh Wilhelmsen i.e., Wilh Wilhelmsen and American Shipping go up and down completely randomly.
Pair Corralation between Wilh Wilhelmsen and American Shipping
Assuming the 90 days trading horizon Wilh Wilhelmsen Holding is expected to generate 0.77 times more return on investment than American Shipping. However, Wilh Wilhelmsen Holding is 1.3 times less risky than American Shipping. It trades about 0.08 of its potential returns per unit of risk. American Shipping is currently generating about -0.02 per unit of risk. If you would invest 38,254 in Wilh Wilhelmsen Holding on August 25, 2024 and sell it today you would earn a total of 6,196 from holding Wilh Wilhelmsen Holding or generate 16.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wilh Wilhelmsen Holding vs. American Shipping
Performance |
| Timeline |
| Wilh Wilhelmsen Holding |
| American Shipping |
Wilh Wilhelmsen and American Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilh Wilhelmsen and American Shipping
The main advantage of trading using opposite Wilh Wilhelmsen and American Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilh Wilhelmsen position performs unexpectedly, American Shipping 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 American Shipping will offset losses from the drop in American Shipping's long position.| Wilh Wilhelmsen vs. Stolt Nielsen Limited | Wilh Wilhelmsen vs. Wilh Wilhelmsen Holding | Wilh Wilhelmsen vs. Veidekke ASA | Wilh Wilhelmsen vs. Odfjell SE |
| American Shipping vs. Stolt Nielsen Limited | American Shipping vs. BW LPG | American Shipping vs. Aker ASA | American Shipping vs. BW Offshore |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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