Correlation Between PT Bank and Nutriband
Can any of the company-specific risk be diversified away by investing in both PT Bank and Nutriband 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 Nutriband 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 Nutriband, you can compare the effects of market volatilities on PT Bank and Nutriband 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 Nutriband. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Nutriband.
Diversification Opportunities for PT Bank and Nutriband
Very good diversification
The 3 months correlation between BKRKF and Nutriband is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Nutriband in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutriband 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 Nutriband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutriband has no effect on the direction of PT Bank i.e., PT Bank and Nutriband go up and down completely randomly.
Pair Corralation between PT Bank and Nutriband
Assuming the 90 days horizon PT Bank is expected to generate 4.91 times less return on investment than Nutriband. But when comparing it to its historical volatility, PT Bank Rakyat is 1.13 times less risky than Nutriband. It trades about 0.02 of its potential returns per unit of risk. Nutriband is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 253.00 in Nutriband on August 26, 2024 and sell it today you would earn a total of 228.00 from holding Nutriband or generate 90.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.74% |
| Values | Daily Returns |
PT Bank Rakyat vs. Nutriband
Performance |
| Timeline |
| PT Bank Rakyat |
| Nutriband |
PT Bank and Nutriband Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Nutriband
The main advantage of trading using opposite PT Bank and Nutriband positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Nutriband 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 Nutriband will offset losses from the drop in Nutriband's long position.The idea behind PT Bank Rakyat and Nutriband 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.| Nutriband vs. Quoin Pharmaceuticals Ltd | Nutriband vs. Longeveron LLC | Nutriband vs. RenovoRx | Nutriband vs. Virax Biolabs Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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