Correlation Between PT Bank and Lassonde Industries
Can any of the company-specific risk be diversified away by investing in both PT Bank and Lassonde Industries 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 Lassonde Industries 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 Lassonde Industries, you can compare the effects of market volatilities on PT Bank and Lassonde Industries 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 Lassonde Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Lassonde Industries.
Diversification Opportunities for PT Bank and Lassonde Industries
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BKRKF and Lassonde is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Lassonde Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lassonde Industries 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 Lassonde Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lassonde Industries has no effect on the direction of PT Bank i.e., PT Bank and Lassonde Industries go up and down completely randomly.
Pair Corralation between PT Bank and Lassonde Industries
Assuming the 90 days horizon PT Bank Rakyat is expected to under-perform the Lassonde Industries. In addition to that, PT Bank is 6.13 times more volatile than Lassonde Industries. It trades about 0.0 of its total potential returns per unit of risk. Lassonde Industries is currently generating about -0.01 per unit of volatility. If you would invest 12,627 in Lassonde Industries on August 27, 2024 and sell it today you would lose (60.00) from holding Lassonde Industries or give up 0.48% 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. Lassonde Industries
Performance |
| Timeline |
| PT Bank Rakyat |
| Lassonde Industries |
PT Bank and Lassonde Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Lassonde Industries
The main advantage of trading using opposite PT Bank and Lassonde Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Lassonde Industries 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 Lassonde Industries will offset losses from the drop in Lassonde Industries' long position.The idea behind PT Bank Rakyat and Lassonde Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Lassonde Industries vs. PepsiCo | Lassonde Industries vs. Coca Cola Consolidated | Lassonde Industries vs. Monster Beverage Corp | Lassonde Industries vs. Celsius Holdings |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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