Correlation Between PT Bank and Oxus Acquisition
Can any of the company-specific risk be diversified away by investing in both PT Bank and Oxus Acquisition 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 Oxus Acquisition 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 Oxus Acquisition Corp, you can compare the effects of market volatilities on PT Bank and Oxus Acquisition 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 Oxus Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Oxus Acquisition.
Diversification Opportunities for PT Bank and Oxus Acquisition
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BKRKF and Oxus is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Oxus Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxus Acquisition Corp 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 Oxus Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxus Acquisition Corp has no effect on the direction of PT Bank i.e., PT Bank and Oxus Acquisition go up and down completely randomly.
Pair Corralation between PT Bank and Oxus Acquisition
Assuming the 90 days horizon PT Bank is expected to generate 18.69 times less return on investment than Oxus Acquisition. But when comparing it to its historical volatility, PT Bank Rakyat is 3.55 times less risky than Oxus Acquisition. It trades about 0.03 of its potential returns per unit of risk. Oxus Acquisition Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Oxus Acquisition Corp on September 2, 2024 and sell it today you would earn a total of 6.00 from holding Oxus Acquisition Corp or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 32.02% |
| Values | Daily Returns |
PT Bank Rakyat vs. Oxus Acquisition Corp
Performance |
| Timeline |
| PT Bank Rakyat |
| Oxus Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PT Bank and Oxus Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Oxus Acquisition
The main advantage of trading using opposite PT Bank and Oxus Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Oxus Acquisition 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 Oxus Acquisition will offset losses from the drop in Oxus Acquisition's long position.The idea behind PT Bank Rakyat and Oxus Acquisition Corp 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.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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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