Correlation Between BankFirst Capital and PT Bank
Can any of the company-specific risk be diversified away by investing in both BankFirst Capital 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 BankFirst Capital and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BankFirst Capital and PT Bank Rakyat, you can compare the effects of market volatilities on BankFirst Capital 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 BankFirst Capital with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BankFirst Capital and PT Bank.
Diversification Opportunities for BankFirst Capital and PT Bank
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BankFirst and BKRKF is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding BankFirst Capital and PT Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Rakyat and BankFirst Capital 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 BankFirst Capital 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 Rakyat has no effect on the direction of BankFirst Capital i.e., BankFirst Capital and PT Bank go up and down completely randomly.
Pair Corralation between BankFirst Capital and PT Bank
Given the investment horizon of 90 days BankFirst Capital is expected to generate 5.02 times less return on investment than PT Bank. But when comparing it to its historical volatility, BankFirst Capital is 2.43 times less risky than PT Bank. It trades about 0.02 of its potential returns per unit of risk. PT Bank Rakyat is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 26.00 in PT Bank Rakyat on September 12, 2024 and sell it today you would earn a total of 3.00 from holding PT Bank Rakyat or generate 11.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 81.78% |
| Values | Daily Returns |
BankFirst Capital vs. PT Bank Rakyat
Performance |
| Timeline |
| BankFirst Capital |
| PT Bank Rakyat |
BankFirst Capital and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BankFirst Capital and PT Bank
The main advantage of trading using opposite BankFirst Capital and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BankFirst Capital 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.| BankFirst Capital vs. PT Bank Rakyat | BankFirst Capital vs. Morningstar Unconstrained Allocation | BankFirst Capital vs. Bondbloxx ETF Trust | BankFirst Capital vs. Spring Valley Acquisition |
| PT Bank vs. Morningstar Unconstrained Allocation | PT Bank vs. Bondbloxx ETF Trust | PT Bank vs. Spring Valley Acquisition | PT Bank vs. Bondbloxx ETF Trust |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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