Correlation Between PT Bank and Dream Industrial
Can any of the company-specific risk be diversified away by investing in both PT Bank and Dream Industrial 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 Dream Industrial 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 Dream Industrial Real, you can compare the effects of market volatilities on PT Bank and Dream Industrial 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 Dream Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Dream Industrial.
Diversification Opportunities for PT Bank and Dream Industrial
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BKRKF and Dream is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Dream Industrial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Industrial Real 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 Dream Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Industrial Real has no effect on the direction of PT Bank i.e., PT Bank and Dream Industrial go up and down completely randomly.
Pair Corralation between PT Bank and Dream Industrial
Assuming the 90 days horizon PT Bank Rakyat is expected to generate 5.41 times more return on investment than Dream Industrial. However, PT Bank is 5.41 times more volatile than Dream Industrial Real. It trades about -0.02 of its potential returns per unit of risk. Dream Industrial Real is currently generating about -0.4 per unit of risk. If you would invest 23.00 in PT Bank Rakyat on September 22, 2024 and sell it today you would lose (2.00) from holding PT Bank Rakyat or give up 8.7% 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. Dream Industrial Real
Performance |
| Timeline |
| PT Bank Rakyat |
| Dream Industrial Real |
PT Bank and Dream Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Dream Industrial
The main advantage of trading using opposite PT Bank and Dream Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Dream Industrial 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 Dream Industrial will offset losses from the drop in Dream Industrial's long position.| PT Bank vs. Morningstar Unconstrained Allocation | PT Bank vs. Bondbloxx ETF Trust | PT Bank vs. Spring Valley Acquisition | PT Bank vs. Bondbloxx ETF Trust |
| Dream Industrial vs. Ashford Hospitality Trust | Dream Industrial vs. Ashford Hospitality Trust | Dream Industrial vs. Braemar Hotels Resorts | Dream Industrial vs. Braemar Hotels Resorts |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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