Correlation Between 2020 Bulkers and Wallenius Wilhelmsen

Can any of the company-specific risk be diversified away by investing in both 2020 Bulkers 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 2020 Bulkers and Wallenius Wilhelmsen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 2020 Bulkers and Wallenius Wilhelmsen Logistics, you can compare the effects of market volatilities on 2020 Bulkers 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 2020 Bulkers with a short position of Wallenius Wilhelmsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2020 Bulkers and Wallenius Wilhelmsen.

Diversification Opportunities for 2020 Bulkers and Wallenius Wilhelmsen

0.89

Correlation Coefficient

2020 Bulkers  Wallenius Wilhelmsen

Very poor diversification

The 3 months correlation between 2020 and Wallenius is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding 2020 Bulkers and Wallenius Wilhelmsen Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wallenius Wilhelmsen and 2020 Bulkers 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 2020 Bulkers 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 2020 Bulkers i.e., 2020 Bulkers and Wallenius Wilhelmsen go up and down completely randomly.

Pair Corralation between 2020 Bulkers and Wallenius Wilhelmsen

Assuming the 90 days trading horizon 2020 Bulkers is expected to generate 1.45 times less return on investment than Wallenius Wilhelmsen. But when comparing it to its historical volatility, 2020 Bulkers is 1.16 times less risky than Wallenius Wilhelmsen. It trades about 0.16 of its potential returns per unit of risk. Wallenius Wilhelmsen Logistics is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  7,290  in Wallenius Wilhelmsen Logistics on April 25, 2025 and sell it today you would earn a total of  2,090  from holding Wallenius Wilhelmsen Logistics or generate 28.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

2020 Bulkers  vs.  Wallenius Wilhelmsen Logistics

2020 Bulkers

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 2020 Bulkers are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, 2020 Bulkers disclosed solid returns over the last few months and may actually be approaching a breakup point.

Wallenius Wilhelmsen

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wallenius Wilhelmsen Logistics are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Wallenius Wilhelmsen disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 2020 Bulkers and Wallenius Wilhelmsen

The main advantage of trading using opposite 2020 Bulkers and Wallenius Wilhelmsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2020 Bulkers 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.

The idea behind 2020 Bulkers and Wallenius Wilhelmsen Logistics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.