Correlation Between PT Bank and Astronics Corp
Can any of the company-specific risk be diversified away by investing in both PT Bank and Astronics Corp 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 Astronics Corp 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 Astronics Corp Cl, you can compare the effects of market volatilities on PT Bank and Astronics Corp 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 Astronics Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Astronics Corp.
Diversification Opportunities for PT Bank and Astronics Corp
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BKRKF and Astronics is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Astronics Corp Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astronics Corp Cl 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 Astronics Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astronics Corp Cl has no effect on the direction of PT Bank i.e., PT Bank and Astronics Corp go up and down completely randomly.
Pair Corralation between PT Bank and Astronics Corp
Assuming the 90 days horizon PT Bank is expected to generate 1.05 times less return on investment than Astronics Corp. In addition to that, PT Bank is 1.28 times more volatile than Astronics Corp Cl. It trades about 0.01 of its total potential returns per unit of risk. Astronics Corp Cl is currently generating about 0.02 per unit of volatility. If you would invest 1,656 in Astronics Corp Cl on August 29, 2024 and sell it today you would lose (72.00) from holding Astronics Corp Cl or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Astronics Corp Cl
Performance |
| Timeline |
| PT Bank Rakyat |
| Astronics Corp Cl |
PT Bank and Astronics Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Astronics Corp
The main advantage of trading using opposite PT Bank and Astronics Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Astronics Corp 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 Astronics Corp will offset losses from the drop in Astronics Corp's long position.| PT Bank vs. Bank Mandiri Persero | PT Bank vs. Piraeus Bank SA | PT Bank vs. Eurobank Ergasias Services | PT Bank vs. Kasikornbank Public Co |
| Astronics Corp vs. Firan Technology Group | Astronics Corp vs. 808 Renewable Energy | Astronics Corp vs. Park Electrochemical | Astronics Corp vs. Innovative Solutions and |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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