Correlation Between PT Bank and ArcBest
Can any of the company-specific risk be diversified away by investing in both PT Bank and ArcBest 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 ArcBest 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 ArcBest, you can compare the effects of market volatilities on PT Bank and ArcBest 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 ArcBest. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and ArcBest.
Diversification Opportunities for PT Bank and ArcBest
Excellent diversification
The 3 months correlation between BYRA and ArcBest is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and ArcBest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ArcBest 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 ArcBest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ArcBest has no effect on the direction of PT Bank i.e., PT Bank and ArcBest go up and down completely randomly.
Pair Corralation between PT Bank and ArcBest
Assuming the 90 days trading horizon PT Bank Rakyat is expected to generate 1.33 times more return on investment than ArcBest. However, PT Bank is 1.33 times more volatile than ArcBest. It trades about -0.02 of its potential returns per unit of risk. ArcBest is currently generating about -0.03 per unit of risk. If you would invest 28.00 in PT Bank Rakyat on September 26, 2024 and sell it today you would lose (2.00) from holding PT Bank Rakyat or give up 7.14% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PT Bank Rakyat vs. ArcBest
Performance |
Timeline |
PT Bank Rakyat |
ArcBest |
PT Bank and ArcBest Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Bank and ArcBest
The main advantage of trading using opposite PT Bank and ArcBest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, ArcBest 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 ArcBest will offset losses from the drop in ArcBest's long position.PT Bank vs. China Merchants Bank | PT Bank vs. HDFC Bank Limited | PT Bank vs. ICICI Bank Limited | PT Bank vs. PT Bank Central |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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