Correlation Between Stolt Nielsen and Wilh Wilhelmsen
Can any of the company-specific risk be diversified away by investing in both Stolt Nielsen and Wilh 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 Stolt Nielsen and Wilh Wilhelmsen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stolt Nielsen Limited and Wilh Wilhelmsen Holding, you can compare the effects of market volatilities on Stolt Nielsen and Wilh 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 Stolt Nielsen with a short position of Wilh Wilhelmsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stolt Nielsen and Wilh Wilhelmsen.
Diversification Opportunities for Stolt Nielsen and Wilh Wilhelmsen
0.51 | Correlation Coefficient |
Very weak diversification
The 1 month correlation between Stolt and Wilh is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Stolt Nielsen Limited and Wilh Wilhelmsen Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilh Wilhelmsen Holding and Stolt Nielsen 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 Stolt Nielsen Limited are associated (or correlated) with Wilh Wilhelmsen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilh Wilhelmsen Holding has no effect on the direction of Stolt Nielsen i.e., Stolt Nielsen and Wilh Wilhelmsen go up and down completely randomly.
Pair Corralation between Stolt Nielsen and Wilh Wilhelmsen
Assuming the 90 days trading horizon Stolt Nielsen Limited is expected to generate 0.85 times more return on investment than Wilh Wilhelmsen. However, Stolt Nielsen Limited is 1.18 times less risky than Wilh Wilhelmsen. It trades about 0.3 of its potential returns per unit of risk. Wilh Wilhelmsen Holding is currently generating about 0.19 per unit of risk. If you would invest 47,302 in Stolt Nielsen Limited on February 14, 2024 and sell it today you would earn a total of 4,498 from holding Stolt Nielsen Limited or generate 9.51% return on investment over 90 days.
Time Period | 1 Month [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Stolt Nielsen Limited vs. Wilh Wilhelmsen Holding
Performance |
Timeline |
Stolt Nielsen Limited |
Wilh Wilhelmsen Holding |
Stolt Nielsen and Wilh Wilhelmsen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Stolt Nielsen and Wilh Wilhelmsen
The main advantage of trading using opposite Stolt Nielsen and Wilh Wilhelmsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stolt Nielsen position performs unexpectedly, Wilh 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 Wilh Wilhelmsen will offset losses from the drop in Wilh Wilhelmsen's long position.Stolt Nielsen vs. Eidesvik Offshore ASA | Stolt Nielsen vs. Borgestad A | Stolt Nielsen vs. Kitron ASA | Stolt Nielsen vs. Havila Shipping ASA |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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