Correlation Between PT Bank and Gruppo Mutuionline

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

Diversification Opportunities for PT Bank and Gruppo Mutuionline

-0.68

Correlation Coefficient

PT Bank  Gruppo Mutuionline

Excellent diversification

The 3 months correlation between BYRA and Gruppo is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Gruppo Mutuionline SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gruppo Mutuionline SpA 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 Gruppo Mutuionline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gruppo Mutuionline SpA has no effect on the direction of PT Bank i.e., PT Bank and Gruppo Mutuionline go up and down completely randomly.

Pair Corralation between PT Bank and Gruppo Mutuionline

Assuming the 90 days trading horizon PT Bank Rakyat is expected to under-perform the Gruppo Mutuionline. In addition to that, PT Bank is 2.2 times more volatile than Gruppo Mutuionline SpA. It trades about -0.02 of its total potential returns per unit of risk. Gruppo Mutuionline SpA is currently generating about 0.04 per unit of volatility. If you would invest  3,570  in Gruppo Mutuionline SpA on September 1, 2024 and sell it today you would earn a total of  135.00  from holding Gruppo Mutuionline SpA or generate 3.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

PT Bank Rakyat  vs.  Gruppo Mutuionline SpA

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 nearly stable basic indicators, PT Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Gruppo Mutuionline SpA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gruppo Mutuionline SpA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Gruppo Mutuionline is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with PT Bank and Gruppo Mutuionline

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

The idea behind PT Bank Rakyat and Gruppo Mutuionline SpA 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.