Correlation Between PT Bank and Flora Growth
Can any of the company-specific risk be diversified away by investing in both PT Bank and Flora Growth 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 Flora Growth 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 Flora Growth Corp, you can compare the effects of market volatilities on PT Bank and Flora Growth 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 Flora Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Flora Growth.
Diversification Opportunities for PT Bank and Flora Growth
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BKRKF and Flora is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Flora Growth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flora Growth 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 Flora Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flora Growth Corp has no effect on the direction of PT Bank i.e., PT Bank and Flora Growth go up and down completely randomly.
Pair Corralation between PT Bank and Flora Growth
Assuming the 90 days horizon PT Bank Rakyat is expected to generate 0.77 times more return on investment than Flora Growth. However, PT Bank Rakyat is 1.29 times less risky than Flora Growth. It trades about -0.08 of its potential returns per unit of risk. Flora Growth Corp is currently generating about -0.08 per unit of risk. If you would invest 32.00 in PT Bank Rakyat on August 23, 2024 and sell it today you would lose (5.00) from holding PT Bank Rakyat or give up 15.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
PT Bank Rakyat vs. Flora Growth Corp
Performance |
| Timeline |
| PT Bank Rakyat |
| Flora Growth Corp |
PT Bank and Flora Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Flora Growth
The main advantage of trading using opposite PT Bank and Flora Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Flora Growth 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 Flora Growth will offset losses from the drop in Flora Growth's long position.The idea behind PT Bank Rakyat and Flora Growth 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.| Flora Growth vs. Catalent | Flora Growth vs. Amphastar P | Flora Growth vs. ANI Pharmaceuticals | Flora Growth vs. Alkermes Plc |
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
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |