Correlation Between ARDAGH METAL and PT Bank
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 Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. PT Bank Maybank
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| PT Bank Maybank |
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.| ARDAGH METAL vs. China Datang | ARDAGH METAL vs. COSTCO WHOLESALE CDR | ARDAGH METAL vs. DATA MODUL | ARDAGH METAL vs. Northern Data AG |
| PT Bank vs. COMPUTERSHARE | PT Bank vs. Summit Hotel Properties | PT Bank vs. GEAR4MUSIC LS 10 | PT Bank vs. NH HOTEL GROUP |
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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