Correlation Between PT Bank and JSE
Can any of the company-specific risk be diversified away by investing in both PT Bank and JSE 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 PT Bank and JSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Rakyat and JSE Limited, you can compare the effects of market volatilities on PT Bank and JSE 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 PT Bank with a short position of JSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and JSE.
Diversification Opportunities for PT Bank and JSE
Very good diversification
The 3 months correlation between BKRKF and JSE is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and JSE Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSE Limited and PT Bank 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 PT Bank Rakyat are associated (or correlated) with JSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSE Limited has no effect on the direction of PT Bank i.e., PT Bank and JSE go up and down completely randomly.
Pair Corralation between PT Bank and JSE
Assuming the 90 days horizon PT Bank Rakyat is expected to under-perform the JSE. In addition to that, PT Bank is 2.24 times more volatile than JSE Limited. It trades about -0.04 of its total potential returns per unit of risk. JSE Limited is currently generating about 0.11 per unit of volatility. If you would invest 550.00 in JSE Limited on September 25, 2024 and sell it today you would earn a total of 115.00 from holding JSE Limited or generate 20.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PT Bank Rakyat vs. JSE Limited
Performance |
Timeline |
PT Bank Rakyat |
JSE Limited |
PT Bank and JSE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Bank and JSE
The main advantage of trading using opposite PT Bank and JSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, JSE 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 JSE will offset losses from the drop in JSE's long position.PT Bank vs. Banco Bradesco SA | PT Bank vs. Itau Unibanco Banco | PT Bank vs. Lloyds Banking Group | PT Bank vs. Deutsche Bank AG |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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