Correlation Between Advanced Medical and PT Bank
Can any of the company-specific risk be diversified away by investing in both Advanced Medical 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 Advanced Medical and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Medical Solutions and PT Bank Maybank, you can compare the effects of market volatilities on Advanced Medical 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 Advanced Medical with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Medical and PT Bank.
Diversification Opportunities for Advanced Medical and PT Bank
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Advanced and BOZA is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions 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 Advanced Medical 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 Advanced Medical Solutions 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 Advanced Medical i.e., Advanced Medical and PT Bank go up and down completely randomly.
Pair Corralation between Advanced Medical and PT Bank
Assuming the 90 days trading horizon Advanced Medical Solutions is expected to generate 1.14 times more return on investment than PT Bank. However, Advanced Medical is 1.14 times more volatile than PT Bank Maybank. It trades about 0.15 of its potential returns per unit of risk. PT Bank Maybank is currently generating about 0.01 per unit of risk. If you would invest 226.00 in Advanced Medical Solutions on August 28, 2024 and sell it today you would earn a total of 24.00 from holding Advanced Medical Solutions or generate 10.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Medical Solutions vs. PT Bank Maybank
Performance |
| Timeline |
| Advanced Medical Sol |
| PT Bank Maybank |
Advanced Medical and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Medical and PT Bank
The main advantage of trading using opposite Advanced Medical and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Medical 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.| Advanced Medical vs. Apple Inc | Advanced Medical vs. Apple Inc | Advanced Medical vs. Apple Inc | Advanced Medical vs. Apple Inc |
| PT Bank vs. SCANDMEDICAL SOLDK 040 | PT Bank vs. Compugroup Medical SE | PT Bank vs. Perdoceo Education | PT Bank vs. EMBARK EDUCATION LTD |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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