Correlation Between BANK HANDLOWY and PERENNIAL ENERGY
Can any of the company-specific risk be diversified away by investing in both BANK HANDLOWY and PERENNIAL ENERGY 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 HANDLOWY and PERENNIAL ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK HANDLOWY and PERENNIAL ENERGY HD 01, you can compare the effects of market volatilities on BANK HANDLOWY and PERENNIAL ENERGY 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 HANDLOWY with a short position of PERENNIAL ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK HANDLOWY and PERENNIAL ENERGY.
Diversification Opportunities for BANK HANDLOWY and PERENNIAL ENERGY
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BANK and PERENNIAL is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding BANK HANDLOWY and PERENNIAL ENERGY HD 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PERENNIAL ENERGY and BANK HANDLOWY 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 HANDLOWY are associated (or correlated) with PERENNIAL ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PERENNIAL ENERGY has no effect on the direction of BANK HANDLOWY i.e., BANK HANDLOWY and PERENNIAL ENERGY go up and down completely randomly.
Pair Corralation between BANK HANDLOWY and PERENNIAL ENERGY
Assuming the 90 days trading horizon BANK HANDLOWY is expected to generate 0.66 times more return on investment than PERENNIAL ENERGY. However, BANK HANDLOWY is 1.52 times less risky than PERENNIAL ENERGY. It trades about 0.06 of its potential returns per unit of risk. PERENNIAL ENERGY HD 01 is currently generating about 0.03 per unit of risk. If you would invest 1,083 in BANK HANDLOWY on August 31, 2024 and sell it today you would earn a total of 947.00 from holding BANK HANDLOWY or generate 87.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK HANDLOWY vs. PERENNIAL ENERGY HD 01
Performance |
| Timeline |
| BANK HANDLOWY |
| PERENNIAL ENERGY |
BANK HANDLOWY and PERENNIAL ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK HANDLOWY and PERENNIAL ENERGY
The main advantage of trading using opposite BANK HANDLOWY and PERENNIAL ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK HANDLOWY position performs unexpectedly, PERENNIAL ENERGY 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 PERENNIAL ENERGY will offset losses from the drop in PERENNIAL ENERGY's long position.| BANK HANDLOWY vs. Transport International Holdings | BANK HANDLOWY vs. JAPAN TOBACCO UNSPADR12 | BANK HANDLOWY vs. COPLAND ROAD CAPITAL | BANK HANDLOWY vs. Liberty Broadband |
| PERENNIAL ENERGY vs. Tianjin Capital Environmental | PERENNIAL ENERGY vs. COPLAND ROAD CAPITAL | PERENNIAL ENERGY vs. Gaztransport Technigaz SA | PERENNIAL ENERGY vs. GOLD ROAD RES |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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