Correlation Between ECHO INVESTMENT and PT Bank
Can any of the company-specific risk be diversified away by investing in both ECHO INVESTMENT and PT Bank 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 ECHO INVESTMENT and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECHO INVESTMENT ZY and PT Bank Mandiri, you can compare the effects of market volatilities on ECHO INVESTMENT and PT Bank 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 ECHO INVESTMENT with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECHO INVESTMENT and PT Bank.
Diversification Opportunities for ECHO INVESTMENT and PT Bank
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ECHO and PQ9 is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding ECHO INVESTMENT ZY and PT Bank Mandiri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Mandiri and ECHO INVESTMENT 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 ECHO INVESTMENT ZY are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Mandiri has no effect on the direction of ECHO INVESTMENT i.e., ECHO INVESTMENT and PT Bank go up and down completely randomly.
Pair Corralation between ECHO INVESTMENT and PT Bank
Assuming the 90 days horizon ECHO INVESTMENT ZY is expected to generate 0.6 times more return on investment than PT Bank. However, ECHO INVESTMENT ZY is 1.67 times less risky than PT Bank. It trades about 0.08 of its potential returns per unit of risk. PT Bank Mandiri is currently generating about 0.03 per unit of risk. If you would invest 37.00 in ECHO INVESTMENT ZY on September 12, 2024 and sell it today you would earn a total of 65.00 from holding ECHO INVESTMENT ZY or generate 175.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECHO INVESTMENT ZY vs. PT Bank Mandiri
Performance |
| Timeline |
| ECHO INVESTMENT ZY |
| PT Bank Mandiri |
ECHO INVESTMENT and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECHO INVESTMENT and PT Bank
The main advantage of trading using opposite ECHO INVESTMENT and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECHO INVESTMENT position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| ECHO INVESTMENT vs. OPEN HOUSE GROUP | ECHO INVESTMENT vs. Superior Plus Corp | ECHO INVESTMENT vs. SIVERS SEMICONDUCTORS AB | ECHO INVESTMENT vs. CHINA HUARONG ENERHD 50 |
| PT Bank vs. China Merchants Bank | PT Bank vs. HDFC Bank Limited | PT Bank vs. ICICI Bank Limited | PT Bank vs. PT Bank Central |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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