Correlation Between PT Global and Commercial Vehicle
Can any of the company-specific risk be diversified away by investing in both PT Global and Commercial Vehicle 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 Global and Commercial Vehicle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Global Mediacom and Commercial Vehicle Group, you can compare the effects of market volatilities on PT Global and Commercial Vehicle 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 Global with a short position of Commercial Vehicle. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Global and Commercial Vehicle.
Diversification Opportunities for PT Global and Commercial Vehicle
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 06L and Commercial is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding PT Global Mediacom and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle and PT Global 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 Global Mediacom are associated (or correlated) with Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of PT Global i.e., PT Global and Commercial Vehicle go up and down completely randomly.
Pair Corralation between PT Global and Commercial Vehicle
If you would invest 0.75 in PT Global Mediacom on August 31, 2024 and sell it today you would earn a total of 0.00 from holding PT Global Mediacom or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Global Mediacom vs. Commercial Vehicle Group
Performance |
| Timeline |
| PT Global Mediacom |
| Commercial Vehicle |
PT Global and Commercial Vehicle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Global and Commercial Vehicle
The main advantage of trading using opposite PT Global and Commercial Vehicle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Global position performs unexpectedly, Commercial Vehicle 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 Commercial Vehicle will offset losses from the drop in Commercial Vehicle's long position.| PT Global vs. Netflix | PT Global vs. Warner Music Group | PT Global vs. Superior Plus Corp | PT Global vs. NMI Holdings |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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