Correlation Between PT Bank and Fosun International
Can any of the company-specific risk be diversified away by investing in both PT Bank and Fosun International 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 Fosun International 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 Fosun International Ltd, you can compare the effects of market volatilities on PT Bank and Fosun International 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 Fosun International. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Fosun International.
Diversification Opportunities for PT Bank and Fosun International
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between BKRKF and Fosun is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Fosun International Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fosun International 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 Fosun International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fosun International has no effect on the direction of PT Bank i.e., PT Bank and Fosun International go up and down completely randomly.
Pair Corralation between PT Bank and Fosun International
Assuming the 90 days horizon PT Bank Rakyat is expected to under-perform the Fosun International. In addition to that, PT Bank is 1.19 times more volatile than Fosun International Ltd. It trades about -0.09 of its total potential returns per unit of risk. Fosun International Ltd is currently generating about -0.09 per unit of volatility. If you would invest 1,481 in Fosun International Ltd on January 12, 2025 and sell it today you would lose (263.00) from holding Fosun International Ltd or give up 17.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Fosun International Ltd
Performance |
| Timeline |
| PT Bank Rakyat |
| Fosun International |
PT Bank and Fosun International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Fosun International
The main advantage of trading using opposite PT Bank and Fosun International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Fosun International 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 Fosun International will offset losses from the drop in Fosun International's long position.| PT Bank vs. Banco Bradesco SA | PT Bank vs. Itau Unibanco Banco | PT Bank vs. Lloyds Banking Group | PT Bank vs. Deutsche Bank AG |
| Fosun International vs. Noble plc | Fosun International vs. Shelf Drilling | Fosun International vs. Precision Drilling | Fosun International vs. Major Drilling Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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