Correlation Between PT Bank and Bonterra Energy
Can any of the company-specific risk be diversified away by investing in both PT Bank and Bonterra Energy 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 Bonterra Energy 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 Bonterra Energy Corp, you can compare the effects of market volatilities on PT Bank and Bonterra Energy 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 Bonterra Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Bonterra Energy.
Diversification Opportunities for PT Bank and Bonterra Energy
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BKRKF and Bonterra is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Bonterra Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonterra Energy Corp 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 Bonterra Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonterra Energy Corp has no effect on the direction of PT Bank i.e., PT Bank and Bonterra Energy go up and down completely randomly.
Pair Corralation between PT Bank and Bonterra Energy
Assuming the 90 days horizon PT Bank Rakyat is expected to generate 2.12 times more return on investment than Bonterra Energy. However, PT Bank is 2.12 times more volatile than Bonterra Energy Corp. It trades about 0.02 of its potential returns per unit of risk. Bonterra Energy Corp is currently generating about -0.11 per unit of risk. If you would invest 25.00 in PT Bank Rakyat on September 2, 2024 and sell it today you would lose (1.00) from holding PT Bank Rakyat or give up 4.0% 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. Bonterra Energy Corp
Performance |
| Timeline |
| PT Bank Rakyat |
| Bonterra Energy Corp |
PT Bank and Bonterra Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Bonterra Energy
The main advantage of trading using opposite PT Bank and Bonterra Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Bonterra Energy 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 Bonterra Energy will offset losses from the drop in Bonterra Energy's long position.The idea behind PT Bank Rakyat and Bonterra Energy Corp 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.| Bonterra Energy vs. Aminex PLC | Bonterra Energy vs. Questerre Energy | Bonterra Energy vs. FAR Limited | Bonterra Energy vs. PetroShale |
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.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |