Correlation Between PT Bank and IA FINANCIAL
Can any of the company-specific risk be diversified away by investing in both PT Bank and IA FINANCIAL 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 IA FINANCIAL 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 IA FINANCIAL P, you can compare the effects of market volatilities on PT Bank and IA FINANCIAL 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 IA FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and IA FINANCIAL.
Diversification Opportunities for PT Bank and IA FINANCIAL
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BYRA and 1OD is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and IA FINANCIAL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IA FINANCIAL P 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 IA FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IA FINANCIAL P has no effect on the direction of PT Bank i.e., PT Bank and IA FINANCIAL go up and down completely randomly.
Pair Corralation between PT Bank and IA FINANCIAL
Assuming the 90 days trading horizon PT Bank Rakyat is expected to generate 3.79 times more return on investment than IA FINANCIAL. However, PT Bank is 3.79 times more volatile than IA FINANCIAL P. It trades about 0.03 of its potential returns per unit of risk. IA FINANCIAL P is currently generating about 0.08 per unit of risk. If you would invest 27.00 in PT Bank Rakyat on September 23, 2024 and sell it today you would lose (2.00) from holding PT Bank Rakyat or give up 7.41% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
PT Bank Rakyat vs. IA FINANCIAL P
Performance |
Timeline |
PT Bank Rakyat |
IA FINANCIAL P |
PT Bank and IA FINANCIAL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Bank and IA FINANCIAL
The main advantage of trading using opposite PT Bank and IA FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, IA FINANCIAL 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 IA FINANCIAL will offset losses from the drop in IA FINANCIAL's long position.PT Bank vs. Tower One Wireless | PT Bank vs. FAST RETAIL ADR | PT Bank vs. Tradegate AG Wertpapierhandelsbank | PT Bank vs. Canon Marketing Japan |
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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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