Correlation Between PT Bank and Beijing Enterprises
Can any of the company-specific risk be diversified away by investing in both PT Bank and Beijing Enterprises 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 Beijing Enterprises 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 Beijing Enterprises Holdings, you can compare the effects of market volatilities on PT Bank and Beijing Enterprises 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 Beijing Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Beijing Enterprises.
Diversification Opportunities for PT Bank and Beijing Enterprises
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BKRKF and Beijing is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Beijing Enterprises Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Enterprises 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 Beijing Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Enterprises has no effect on the direction of PT Bank i.e., PT Bank and Beijing Enterprises go up and down completely randomly.
Pair Corralation between PT Bank and Beijing Enterprises
If you would invest 329.00 in Beijing Enterprises Holdings on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Beijing Enterprises Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Beijing Enterprises Holdings
Performance |
| Timeline |
| PT Bank Rakyat |
| Beijing Enterprises |
PT Bank and Beijing Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Beijing Enterprises
The main advantage of trading using opposite PT Bank and Beijing Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Beijing Enterprises 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 Beijing Enterprises will offset losses from the drop in Beijing Enterprises' long position.The idea behind PT Bank Rakyat and Beijing Enterprises Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Beijing Enterprises vs. Honeywell International | Beijing Enterprises vs. MDU Resources Group | Beijing Enterprises vs. Compass Diversified Holdings | Beijing Enterprises vs. Valmont Industries |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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