Correlation Between BCB Bancorp and PTL
Can any of the company-specific risk be diversified away by investing in both BCB Bancorp and PTL 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 BCB Bancorp and PTL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCB Bancorp and PTL LTD Ordinary, you can compare the effects of market volatilities on BCB Bancorp and PTL 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 BCB Bancorp with a short position of PTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCB Bancorp and PTL.
Diversification Opportunities for BCB Bancorp and PTL
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BCB and PTL is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding BCB Bancorp and PTL LTD Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTL LTD Ordinary and BCB Bancorp 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 BCB Bancorp are associated (or correlated) with PTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTL LTD Ordinary has no effect on the direction of BCB Bancorp i.e., BCB Bancorp and PTL go up and down completely randomly.
Pair Corralation between BCB Bancorp and PTL
Given the investment horizon of 90 days BCB Bancorp is expected to generate 7.77 times less return on investment than PTL. But when comparing it to its historical volatility, BCB Bancorp is 6.25 times less risky than PTL. It trades about 0.19 of its potential returns per unit of risk. PTL LTD Ordinary is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 417.00 in PTL LTD Ordinary on August 31, 2024 and sell it today you would earn a total of 271.00 from holding PTL LTD Ordinary or generate 64.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCB Bancorp vs. PTL LTD Ordinary
Performance |
| Timeline |
| BCB Bancorp |
| PTL LTD Ordinary |
BCB Bancorp and PTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCB Bancorp and PTL
The main advantage of trading using opposite BCB Bancorp and PTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCB Bancorp position performs unexpectedly, PTL 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 PTL will offset losses from the drop in PTL's long position.| BCB Bancorp vs. Provident Financial Services | BCB Bancorp vs. First Mid Illinois | BCB Bancorp vs. ConnectOne Bancorp | BCB Bancorp vs. Finward Bancorp |
| PTL vs. Summit Environmental | PTL vs. Algoma Steel Group | PTL vs. Hf Foods Group | PTL vs. Sanyo Special Steel |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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