Correlation Between PT Bank and Bankinter
Can any of the company-specific risk be diversified away by investing in both PT Bank and Bankinter 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 Bankinter 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 Bankinter SA ADR, you can compare the effects of market volatilities on PT Bank and Bankinter 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 Bankinter. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Bankinter.
Diversification Opportunities for PT Bank and Bankinter
Poor diversification
The 3 months correlation between BKRKF and Bankinter is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Bankinter SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankinter SA ADR 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 Bankinter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankinter SA ADR has no effect on the direction of PT Bank i.e., PT Bank and Bankinter go up and down completely randomly.
Pair Corralation between PT Bank and Bankinter
Assuming the 90 days horizon PT Bank Rakyat is expected to generate 2.51 times more return on investment than Bankinter. However, PT Bank is 2.51 times more volatile than Bankinter SA ADR. It trades about 0.04 of its potential returns per unit of risk. Bankinter SA ADR is currently generating about -0.01 per unit of risk. If you would invest 26.00 in PT Bank Rakyat on August 30, 2024 and sell it today you would earn a total of 0.00 from holding PT Bank Rakyat or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Bankinter SA ADR
Performance |
| Timeline |
| PT Bank Rakyat |
| Bankinter SA ADR |
PT Bank and Bankinter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Bankinter
The main advantage of trading using opposite PT Bank and Bankinter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Bankinter 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 Bankinter will offset losses from the drop in Bankinter'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 |
| Bankinter vs. Bank Hapoalim ADR | Bankinter vs. Bank of East | Bankinter vs. BOC Hong Kong | Bankinter vs. Commercial International Bank |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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