Correlation Between Berkshire Hills and PT Global
Can any of the company-specific risk be diversified away by investing in both Berkshire Hills and PT Global 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 Berkshire Hills and PT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkshire Hills Bancorp and PT Global Mediacom, you can compare the effects of market volatilities on Berkshire Hills and PT Global 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 Berkshire Hills with a short position of PT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkshire Hills and PT Global.
Diversification Opportunities for Berkshire Hills and PT Global
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Berkshire and 06L is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Berkshire Hills Bancorp and PT Global Mediacom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Global Mediacom and Berkshire Hills 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 Berkshire Hills Bancorp are associated (or correlated) with PT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Global Mediacom has no effect on the direction of Berkshire Hills i.e., Berkshire Hills and PT Global go up and down completely randomly.
Pair Corralation between Berkshire Hills and PT Global
Assuming the 90 days horizon Berkshire Hills is expected to generate 3.18 times less return on investment than PT Global. But when comparing it to its historical volatility, Berkshire Hills Bancorp is 6.73 times less risky than PT Global. It trades about 0.12 of its potential returns per unit of risk. PT Global Mediacom is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.80 in PT Global Mediacom on September 3, 2024 and sell it today you would lose (0.05) from holding PT Global Mediacom or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkshire Hills Bancorp vs. PT Global Mediacom
Performance |
| Timeline |
| Berkshire Hills Bancorp |
| PT Global Mediacom |
Berkshire Hills and PT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkshire Hills and PT Global
The main advantage of trading using opposite Berkshire Hills and PT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkshire Hills position performs unexpectedly, PT Global 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 Global will offset losses from the drop in PT Global's long position.| Berkshire Hills vs. Postal Savings Bank | Berkshire Hills vs. CAIXABANK UNADR 13 | Berkshire Hills vs. Superior Plus Corp | Berkshire Hills vs. NMI Holdings |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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