Correlation Between ARDAGH METAL and PT Bank

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Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL 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 ARDAGH METAL and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARDAGH METAL PACDL 0001 and PT Bank Maybank, you can compare the effects of market volatilities on ARDAGH METAL 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 ARDAGH METAL with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and PT Bank.

Diversification Opportunities for ARDAGH METAL and PT Bank

0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between ARDAGH and BOZA is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 and PT Bank Maybank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Maybank and ARDAGH METAL 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 ARDAGH METAL PACDL 0001 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 Maybank has no effect on the direction of ARDAGH METAL i.e., ARDAGH METAL and PT Bank go up and down completely randomly.

Pair Corralation between ARDAGH METAL and PT Bank

Assuming the 90 days horizon ARDAGH METAL PACDL 0001 is expected to under-perform the PT Bank. In addition to that, ARDAGH METAL is 1.41 times more volatile than PT Bank Maybank. It trades about -0.03 of its total potential returns per unit of risk. PT Bank Maybank is currently generating about -0.02 per unit of volatility. If you would invest  1.15  in PT Bank Maybank on December 11, 2024 and sell it today you would lose (0.05) from holding PT Bank Maybank or give up 4.35% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

ARDAGH METAL PACDL 0001  vs.  PT Bank Maybank

 Performance 
       Timeline  
ARDAGH METAL PACDL 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days ARDAGH METAL PACDL 0001 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
PT Bank Maybank 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days PT Bank Maybank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PT Bank is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

ARDAGH METAL and PT Bank Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with ARDAGH METAL and PT Bank

The main advantage of trading using opposite ARDAGH METAL and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL 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.
The idea behind ARDAGH METAL PACDL 0001 and PT Bank Maybank 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.
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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