Correlation Between PT Bank and Chesapeake Finl
Can any of the company-specific risk be diversified away by investing in both PT Bank and Chesapeake Finl 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 Chesapeake Finl 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 Chesapeake Finl Shs, you can compare the effects of market volatilities on PT Bank and Chesapeake Finl 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 Chesapeake Finl. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Chesapeake Finl.
Diversification Opportunities for PT Bank and Chesapeake Finl
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BKRKF and Chesapeake is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Chesapeake Finl Shs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Finl Shs 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 Chesapeake Finl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Finl Shs has no effect on the direction of PT Bank i.e., PT Bank and Chesapeake Finl go up and down completely randomly.
Pair Corralation between PT Bank and Chesapeake Finl
Assuming the 90 days horizon PT Bank Rakyat is expected to generate 8.43 times more return on investment than Chesapeake Finl. However, PT Bank is 8.43 times more volatile than Chesapeake Finl Shs. It trades about 0.01 of its potential returns per unit of risk. Chesapeake Finl Shs is currently generating about 0.06 per unit of risk. If you would invest 26.00 in PT Bank Rakyat on September 1, 2024 and sell it today you would lose (1.00) from holding PT Bank Rakyat or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Chesapeake Finl Shs
Performance |
| Timeline |
| PT Bank Rakyat |
| Chesapeake Finl Shs |
PT Bank and Chesapeake Finl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Chesapeake Finl
The main advantage of trading using opposite PT Bank and Chesapeake Finl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Chesapeake Finl 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 Chesapeake Finl will offset losses from the drop in Chesapeake Finl's long position.| PT Bank vs. Piraeus Bank SA | PT Bank vs. Turkiye Garanti Bankasi | PT Bank vs. Delhi Bank Corp | PT Bank vs. Uwharrie Capital Corp |
| Chesapeake Finl vs. HUMANA INC | Chesapeake Finl vs. SCOR PK | Chesapeake Finl vs. Aquagold International | Chesapeake Finl vs. Thrivent High Yield |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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