Correlation Between PT Bank and Farmers Bancorp
Can any of the company-specific risk be diversified away by investing in both PT Bank and Farmers Bancorp 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 Farmers Bancorp 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 Farmers Bancorp, you can compare the effects of market volatilities on PT Bank and Farmers Bancorp 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 Farmers Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Farmers Bancorp.
Diversification Opportunities for PT Bank and Farmers Bancorp
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BKRKF and Farmers is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Farmers Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers Bancorp 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 Farmers Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers Bancorp has no effect on the direction of PT Bank i.e., PT Bank and Farmers Bancorp go up and down completely randomly.
Pair Corralation between PT Bank and Farmers Bancorp
Assuming the 90 days horizon PT Bank Rakyat is expected to under-perform the Farmers Bancorp. In addition to that, PT Bank is 4.46 times more volatile than Farmers Bancorp. It trades about -0.01 of its total potential returns per unit of risk. Farmers Bancorp is currently generating about 0.28 per unit of volatility. If you would invest 3,425 in Farmers Bancorp on September 13, 2024 and sell it today you would earn a total of 375.00 from holding Farmers Bancorp or generate 10.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
PT Bank Rakyat vs. Farmers Bancorp
Performance |
| Timeline |
| PT Bank Rakyat |
| Farmers Bancorp |
PT Bank and Farmers Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Farmers Bancorp
The main advantage of trading using opposite PT Bank and Farmers Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Farmers Bancorp 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 Farmers Bancorp will offset losses from the drop in Farmers Bancorp'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 |
| Farmers Bancorp vs. First Farmers Financial | Farmers Bancorp vs. Farmers Merchants Bancorp | Farmers Bancorp vs. Lakeland Financial | Farmers Bancorp vs. Eagle Financial Services |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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