Correlation Between PT Bank and Oxford Lane
Can any of the company-specific risk be diversified away by investing in both PT Bank and Oxford Lane 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 Oxford Lane 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 Oxford Lane Capital, you can compare the effects of market volatilities on PT Bank and Oxford Lane 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 Oxford Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Oxford Lane.
Diversification Opportunities for PT Bank and Oxford Lane
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BKRKF and Oxford is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Oxford Lane Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Lane Capital 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 Oxford Lane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Lane Capital has no effect on the direction of PT Bank i.e., PT Bank and Oxford Lane go up and down completely randomly.
Pair Corralation between PT Bank and Oxford Lane
Assuming the 90 days horizon PT Bank Rakyat is expected to generate 17.35 times more return on investment than Oxford Lane. However, PT Bank is 17.35 times more volatile than Oxford Lane Capital. It trades about 0.02 of its potential returns per unit of risk. Oxford Lane Capital is currently generating about 0.13 per unit of risk. If you would invest 31.00 in PT Bank Rakyat on August 24, 2024 and sell it today you would lose (4.00) from holding PT Bank Rakyat or give up 12.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 84.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Oxford Lane Capital
Performance |
| Timeline |
| PT Bank Rakyat |
| Oxford Lane Capital |
PT Bank and Oxford Lane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Oxford Lane
The main advantage of trading using opposite PT Bank and Oxford Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Oxford Lane 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 Oxford Lane will offset losses from the drop in Oxford Lane's long position.| PT Bank vs. Nedbank Group | PT Bank vs. Standard Bank Group | PT Bank vs. Bank Central Asia | PT Bank vs. PSB Holdings |
| Oxford Lane vs. Oxford Lane Capital | Oxford Lane vs. Gladstone Commercial Corp | Oxford Lane vs. New York Mortgage | Oxford Lane vs. New York Mortgage |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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