Correlation Between Bank Central and SITO Mobile

Can any of the company-specific risk be diversified away by investing in both Bank Central and SITO Mobile 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 Bank Central and SITO Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bank Central Asia and SITO Mobile, you can compare the effects of market volatilities on Bank Central and SITO Mobile 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 Bank Central with a short position of SITO Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and SITO Mobile.

Diversification Opportunities for Bank Central and SITO Mobile

-0.45

Correlation Coefficient

Bank Central  SITO Mobile

Very good diversification

The 3 months correlation between Bank and SITO is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and SITO Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SITO Mobile and Bank Central 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 Bank Central Asia are associated (or correlated) with SITO Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SITO Mobile has no effect on the direction of Bank Central i.e., Bank Central and SITO Mobile go up and down completely randomly.

Pair Corralation between Bank Central and SITO Mobile

If you would invest  1,525  in Bank Central Asia on September 8, 2024 and sell it today you would earn a total of  99.00  from holding Bank Central Asia or generate 6.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.44%
Values	Daily Returns

Bank Central Asia  vs.  SITO Mobile

Bank Central Asia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Central Asia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Bank Central is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

SITO Mobile

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Bank Central and SITO Mobile

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

The idea behind Bank Central Asia and SITO Mobile 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.