Correlation Between PT Bank and PacWest Bancorp
Can any of the company-specific risk be diversified away by investing in both PT Bank and PacWest Bancorp 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 PacWest Bancorp 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 PacWest Bancorp, you can compare the effects of market volatilities on PT Bank and PacWest Bancorp 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 PacWest Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and PacWest Bancorp.
Diversification Opportunities for PT Bank and PacWest Bancorp
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between BKRKF and PacWest is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and PacWest Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PacWest Bancorp 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 PacWest Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PacWest Bancorp has no effect on the direction of PT Bank i.e., PT Bank and PacWest Bancorp go up and down completely randomly.
Pair Corralation between PT Bank and PacWest Bancorp
If you would invest 27.00 in PT Bank Rakyat on October 23, 2024 and sell it today you would lose (3.00) from holding PT Bank Rakyat or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 2.63% |
| Values | Daily Returns |
PT Bank Rakyat vs. PacWest Bancorp
Performance |
| Timeline |
| PT Bank Rakyat |
| PacWest Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PT Bank and PacWest Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and PacWest Bancorp
The main advantage of trading using opposite PT Bank and PacWest Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, PacWest Bancorp 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 PacWest Bancorp will offset losses from the drop in PacWest Bancorp's 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 |
| PacWest Bancorp vs. Zions Bancorporation | PacWest Bancorp vs. KeyCorp | PacWest Bancorp vs. Comerica | PacWest Bancorp vs. First Horizon National |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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