Correlation Between PT Bank and Advantest
Can any of the company-specific risk be diversified away by investing in both PT Bank and Advantest 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 PT Bank and Advantest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Rakyat and Advantest, you can compare the effects of market volatilities on PT Bank and Advantest 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 PT Bank with a short position of Advantest. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Advantest.
Diversification Opportunities for PT Bank and Advantest
Excellent diversification
The 3 months correlation between BKRKF and Advantest is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Advantest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantest and PT Bank 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 PT Bank Rakyat are associated (or correlated) with Advantest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantest has no effect on the direction of PT Bank i.e., PT Bank and Advantest go up and down completely randomly.
Pair Corralation between PT Bank and Advantest
Assuming the 90 days horizon PT Bank Rakyat is expected to under-perform the Advantest. In addition to that, PT Bank is 1.9 times more volatile than Advantest. It trades about -0.08 of its total potential returns per unit of risk. Advantest is currently generating about 0.28 per unit of volatility. If you would invest 5,104 in Advantest on August 24, 2024 and sell it today you would earn a total of 1,146 from holding Advantest or generate 22.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Advantest
Performance |
| Timeline |
| PT Bank Rakyat |
| Advantest |
PT Bank and Advantest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Advantest
The main advantage of trading using opposite PT Bank and Advantest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Advantest 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 Advantest will offset losses from the drop in Advantest's long position.| PT Bank vs. Bank Rakyat | PT Bank vs. Nedbank Group | PT Bank vs. Standard Bank Group | PT Bank vs. Bank Central Asia |
| Advantest vs. Tokyo Electron | Advantest vs. Ultra Clean Holdings | Advantest vs. Applied Materials | Advantest vs. Sumco Corp ADR |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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