Correlation Between PT Bank and Tego Cyber

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

Diversification Opportunities for PT Bank and Tego Cyber

-0.34

Correlation Coefficient

PT Bank  Tego Cyber

Very good diversification

The 3 months correlation between BKRKF and Tego is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Tego Cyber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tego Cyber 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 Tego Cyber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tego Cyber has no effect on the direction of PT Bank i.e., PT Bank and Tego Cyber go up and down completely randomly.

Pair Corralation between PT Bank and Tego Cyber

Assuming the 90 days horizon PT Bank Rakyat is expected to under-perform the Tego Cyber. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Bank Rakyat is 2.92 times less risky than Tego Cyber. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Tego Cyber is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  9.48  in Tego Cyber on September 23, 2024 and sell it today you would lose (1.48) from holding Tego Cyber or give up 15.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

PT Bank Rakyat  vs.  Tego Cyber

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 unsteady performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Tego Cyber

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tego Cyber are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent fundamental indicators, Tego Cyber sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Bank and Tego Cyber

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

The idea behind PT Bank Rakyat and Tego Cyber 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.