Correlation Between PT Bank and Haier Smart
Can any of the company-specific risk be diversified away by investing in both PT Bank and Haier Smart 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 Haier Smart 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 Haier Smart Home, you can compare the effects of market volatilities on PT Bank and Haier Smart 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 Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Haier Smart.
Diversification Opportunities for PT Bank and Haier Smart
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BKRKF and Haier is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home 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 Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of PT Bank i.e., PT Bank and Haier Smart go up and down completely randomly.
Pair Corralation between PT Bank and Haier Smart
Assuming the 90 days horizon PT Bank Rakyat is expected to generate 1.48 times more return on investment than Haier Smart. However, PT Bank is 1.48 times more volatile than Haier Smart Home. It trades about 0.03 of its potential returns per unit of risk. Haier Smart Home is currently generating about 0.02 per unit of risk. If you would invest 25.00 in PT Bank Rakyat on August 31, 2024 and sell it today you would earn a total of 0.00 from holding PT Bank Rakyat or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.82% |
| Values | Daily Returns |
PT Bank Rakyat vs. Haier Smart Home
Performance |
| Timeline |
| PT Bank Rakyat |
| Haier Smart Home |
PT Bank and Haier Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Haier Smart
The main advantage of trading using opposite PT Bank and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Haier Smart 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 Haier Smart will offset losses from the drop in Haier Smart'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 |
| Haier Smart vs. La Z Boy Incorporated | Haier Smart vs. MasterBrand | Haier Smart vs. MillerKnoll | Haier Smart vs. Flexsteel Industries |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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