Correlation Between Wilh Wilhelmsen and MPC Container

Can any of the company-specific risk be diversified away by investing in both Wilh Wilhelmsen and MPC Container 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 MPC Container 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 MPC Container Ships, you can compare the effects of market volatilities on Wilh Wilhelmsen and MPC Container 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 MPC Container. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilh Wilhelmsen and MPC Container.

Diversification Opportunities for Wilh Wilhelmsen and MPC Container

0.58

Correlation Coefficient

Wilh Wilhelmsen  MPC Container

Very weak diversification

The 3 months correlation between Wilh and MPC is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Wilh Wilhelmsen Holding and MPC Container Ships in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPC Container Ships 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 MPC Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPC Container Ships has no effect on the direction of Wilh Wilhelmsen i.e., Wilh Wilhelmsen and MPC Container go up and down completely randomly.

Pair Corralation between Wilh Wilhelmsen and MPC Container

Assuming the 90 days trading horizon Wilh Wilhelmsen is expected to generate 1.14 times less return on investment than MPC Container. But when comparing it to its historical volatility, Wilh Wilhelmsen Holding is 1.91 times less risky than MPC Container. It trades about 0.27 of its potential returns per unit of risk. MPC Container Ships is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,440  in MPC Container Ships on April 23, 2025 and sell it today you would earn a total of  398.00  from holding MPC Container Ships or generate 27.64% return on investment over 90 days.

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

Wilh Wilhelmsen Holding  vs.  MPC Container Ships

Wilh Wilhelmsen Holding

Risk-Adjusted Performance

Solid

Over the last 90 days Wilh Wilhelmsen Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite weak essential indicators, Wilh Wilhelmsen disclosed solid returns over the last few months and may actually be approaching a breakup point.

MPC Container Ships

Risk-Adjusted Performance

Good

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

Pair Trading with Wilh Wilhelmsen and MPC Container

The main advantage of trading using opposite Wilh Wilhelmsen and MPC Container positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilh Wilhelmsen position performs unexpectedly, MPC Container 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 MPC Container will offset losses from the drop in MPC Container's long position.

The idea behind Wilh Wilhelmsen Holding and MPC Container Ships 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.