Correlation Between PT Bank and JAPAN POST
Can any of the company-specific risk be diversified away by investing in both PT Bank and JAPAN POST 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 JAPAN POST 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 JAPAN POST BANK, you can compare the effects of market volatilities on PT Bank and JAPAN POST 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 JAPAN POST. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and JAPAN POST.
Diversification Opportunities for PT Bank and JAPAN POST
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between BKRKF and JAPAN is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and JAPAN POST BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAPAN POST BANK 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 JAPAN POST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAPAN POST BANK has no effect on the direction of PT Bank i.e., PT Bank and JAPAN POST go up and down completely randomly.
Pair Corralation between PT Bank and JAPAN POST
Assuming the 90 days horizon PT Bank Rakyat is expected to generate 4.31 times more return on investment than JAPAN POST. However, PT Bank is 4.31 times more volatile than JAPAN POST BANK. It trades about 0.01 of its potential returns per unit of risk. JAPAN POST BANK is currently generating about 0.05 per unit of risk. If you would invest 33.00 in PT Bank Rakyat on August 30, 2024 and sell it today you would lose (7.00) from holding PT Bank Rakyat or give up 21.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 77.16% |
| Values | Daily Returns |
PT Bank Rakyat vs. JAPAN POST BANK
Performance |
| Timeline |
| PT Bank Rakyat |
| JAPAN POST BANK |
PT Bank and JAPAN POST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and JAPAN POST
The main advantage of trading using opposite PT Bank and JAPAN POST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, JAPAN POST 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 JAPAN POST will offset losses from the drop in JAPAN POST'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 |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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