Correlation Between PT Bank and Fentura Financial
Can any of the company-specific risk be diversified away by investing in both PT Bank and Fentura Financial 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 Fentura Financial 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 Fentura Financial, you can compare the effects of market volatilities on PT Bank and Fentura Financial 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 Fentura Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Fentura Financial.
Diversification Opportunities for PT Bank and Fentura Financial
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BKRKF and Fentura is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Fentura Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fentura Financial 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 Fentura Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fentura Financial has no effect on the direction of PT Bank i.e., PT Bank and Fentura Financial go up and down completely randomly.
Pair Corralation between PT Bank and Fentura Financial
Assuming the 90 days horizon PT Bank is expected to generate 4.29 times less return on investment than Fentura Financial. In addition to that, PT Bank is 3.6 times more volatile than Fentura Financial. It trades about 0.01 of its total potential returns per unit of risk. Fentura Financial is currently generating about 0.22 per unit of volatility. If you would invest 4,104 in Fentura Financial on September 1, 2024 and sell it today you would earn a total of 446.00 from holding Fentura Financial or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
PT Bank Rakyat vs. Fentura Financial
Performance |
| Timeline |
| PT Bank Rakyat |
| Fentura Financial |
PT Bank and Fentura Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Fentura Financial
The main advantage of trading using opposite PT Bank and Fentura Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Fentura Financial 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 Fentura Financial will offset losses from the drop in Fentura Financial'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 |
| Fentura Financial vs. Pioneer Bankcorp | Fentura Financial vs. Liberty Northwest Bancorp | Fentura Financial vs. First Community | Fentura Financial vs. Coeur dAlene Bancorp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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