Correlation Between PT Bank and Orient Overseas
Can any of the company-specific risk be diversified away by investing in both PT Bank and Orient Overseas 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 Orient Overseas 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 Orient Overseas International, you can compare the effects of market volatilities on PT Bank and Orient Overseas 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 Orient Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Orient Overseas.
Diversification Opportunities for PT Bank and Orient Overseas
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BKRKF and Orient is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Orient Overseas International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Overseas Inte 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 Orient Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Overseas Inte has no effect on the direction of PT Bank i.e., PT Bank and Orient Overseas go up and down completely randomly.
Pair Corralation between PT Bank and Orient Overseas
Assuming the 90 days horizon PT Bank Rakyat is expected to generate 3.58 times more return on investment than Orient Overseas. However, PT Bank is 3.58 times more volatile than Orient Overseas International. It trades about 0.01 of its potential returns per unit of risk. Orient Overseas International is currently generating about -0.04 per unit of risk. If you would invest 26.00 in PT Bank Rakyat on August 31, 2024 and sell it today you would lose (1.00) from holding PT Bank Rakyat or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Orient Overseas International
Performance |
| Timeline |
| PT Bank Rakyat |
| Orient Overseas Inte |
PT Bank and Orient Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Orient Overseas
The main advantage of trading using opposite PT Bank and Orient Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Orient Overseas 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 Orient Overseas will offset losses from the drop in Orient Overseas' 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 |
| Orient Overseas vs. Hapag Lloyd Aktiengesellschaft | Orient Overseas vs. Hapag Lloyd Aktiengesellschaft | Orient Overseas vs. AP Moeller Maersk AS | Orient Overseas vs. AP Mller |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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