Correlation Between PT Bank and Pyxis Tankers

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

Diversification Opportunities for PT Bank and Pyxis Tankers

-0.77

Correlation Coefficient

PT Bank  Pyxis Tankers

Pay attention - limited upside

The 3 months correlation between BKRKF and Pyxis is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Pyxis Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pyxis Tankers 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 Pyxis Tankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pyxis Tankers has no effect on the direction of PT Bank i.e., PT Bank and Pyxis Tankers go up and down completely randomly.

Pair Corralation between PT Bank and Pyxis Tankers

Assuming the 90 days horizon PT Bank Rakyat is expected to under-perform the Pyxis Tankers. In addition to that, PT Bank is 38.52 times more volatile than Pyxis Tankers. It trades about -0.03 of its total potential returns per unit of risk. Pyxis Tankers is currently generating about 0.1 per unit of volatility. If you would invest  2,485  in Pyxis Tankers on September 14, 2024 and sell it today you would earn a total of  12.00  from holding Pyxis Tankers or generate 0.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	49.21%
Values	Daily Returns

PT Bank Rakyat  vs.  Pyxis Tankers

PT Bank Rakyat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Bank Rakyat has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's forward-looking signals remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pyxis Tankers

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Pyxis Tankers has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Pyxis Tankers is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with PT Bank and Pyxis Tankers

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

The idea behind PT Bank Rakyat and Pyxis Tankers 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.