Correlation Between PT Bank and Growth For
Can any of the company-specific risk be diversified away by investing in both PT Bank and Growth For 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 Growth For 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 The Growth For, you can compare the effects of market volatilities on PT Bank and Growth For 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 Growth For. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Growth For.
Diversification Opportunities for PT Bank and Growth For
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BKRKF and Growth is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and The Growth For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth For 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 Growth For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth For has no effect on the direction of PT Bank i.e., PT Bank and Growth For go up and down completely randomly.
Pair Corralation between PT Bank and Growth For
Assuming the 90 days horizon PT Bank is expected to generate 39.09 times less return on investment than Growth For. But when comparing it to its historical volatility, PT Bank Rakyat is 4.75 times less risky than Growth For. It trades about 0.02 of its potential returns per unit of risk. The Growth For is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2.44 in The Growth For on September 4, 2024 and sell it today you would earn a total of 16.56 from holding The Growth For or generate 678.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 20.3% |
| Values | Daily Returns |
PT Bank Rakyat vs. The Growth For
Performance |
| Timeline |
| PT Bank Rakyat |
| Growth For |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PT Bank and Growth For Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Growth For
The main advantage of trading using opposite PT Bank and Growth For positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Growth For 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 Growth For will offset losses from the drop in Growth For's long position.| PT Bank vs. First Hawaiian | PT Bank vs. Central Pacific Financial | PT Bank vs. Territorial Bancorp | PT Bank vs. Comerica |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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