Correlation Between PT Bank and PlantFuel Life
Can any of the company-specific risk be diversified away by investing in both PT Bank and PlantFuel Life 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 PlantFuel Life 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 PlantFuel Life, you can compare the effects of market volatilities on PT Bank and PlantFuel Life 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 PlantFuel Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and PlantFuel Life.
Diversification Opportunities for PT Bank and PlantFuel Life
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BKRKF and PlantFuel is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and PlantFuel Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlantFuel Life 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 PlantFuel Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlantFuel Life has no effect on the direction of PT Bank i.e., PT Bank and PlantFuel Life go up and down completely randomly.
Pair Corralation between PT Bank and PlantFuel Life
Assuming the 90 days horizon PT Bank Rakyat is expected to under-perform the PlantFuel Life. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Bank Rakyat is 10.4 times less risky than PlantFuel Life. The pink sheet trades about -0.15 of its potential returns per unit of risk. The PlantFuel Life is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 0.07 in PlantFuel Life on September 2, 2024 and sell it today you would earn a total of 0.93 from holding PlantFuel Life or generate 1328.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
PT Bank Rakyat vs. PlantFuel Life
Performance |
| Timeline |
| PT Bank Rakyat |
| PlantFuel Life |
PT Bank and PlantFuel Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and PlantFuel Life
The main advantage of trading using opposite PT Bank and PlantFuel Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, PlantFuel Life 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 PlantFuel Life will offset losses from the drop in PlantFuel Life's long position.The idea behind PT Bank Rakyat and PlantFuel Life 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.| PlantFuel Life vs. The A2 Milk | PlantFuel Life vs. Artisan Consumer Goods | PlantFuel Life vs. General Mills |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |