Correlation Between PT Bank and Los Andes
Can any of the company-specific risk be diversified away by investing in both PT Bank and Los Andes 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 Los Andes 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 Los Andes Copper, you can compare the effects of market volatilities on PT Bank and Los Andes 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 Los Andes. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Los Andes.
Diversification Opportunities for PT Bank and Los Andes
Average diversification
The 3 months correlation between BKRKF and Los is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Los Andes Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Los Andes Copper 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 Los Andes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Los Andes Copper has no effect on the direction of PT Bank i.e., PT Bank and Los Andes go up and down completely randomly.
Pair Corralation between PT Bank and Los Andes
Assuming the 90 days horizon PT Bank Rakyat is expected to generate 2.81 times more return on investment than Los Andes. However, PT Bank is 2.81 times more volatile than Los Andes Copper. It trades about 0.02 of its potential returns per unit of risk. Los Andes Copper is currently generating about -0.06 per unit of risk. If you would invest 31.00 in PT Bank Rakyat on January 7, 2025 and sell it today you would lose (7.00) from holding PT Bank Rakyat or give up 22.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 71.72% |
| Values | Daily Returns |
PT Bank Rakyat vs. Los Andes Copper
Performance |
| Timeline |
| PT Bank Rakyat |
| Los Andes Copper |
PT Bank and Los Andes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Los Andes
The main advantage of trading using opposite PT Bank and Los Andes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Los Andes 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 Los Andes will offset losses from the drop in Los Andes' 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 |
| Los Andes vs. Piedmont Lithium Ltd | Los Andes vs. Sigma Lithium Resources | Los Andes vs. Standard Lithium | Los Andes vs. MP Materials Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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