Correlation Between PT Bank and Pixelworks
Can any of the company-specific risk be diversified away by investing in both PT Bank and Pixelworks 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 Pixelworks 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 Pixelworks, you can compare the effects of market volatilities on PT Bank and Pixelworks 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 Pixelworks. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Pixelworks.
Diversification Opportunities for PT Bank and Pixelworks
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BKRKF and Pixelworks is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Pixelworks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pixelworks 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 Pixelworks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pixelworks has no effect on the direction of PT Bank i.e., PT Bank and Pixelworks go up and down completely randomly.
Pair Corralation between PT Bank and Pixelworks
Assuming the 90 days horizon PT Bank Rakyat is expected to under-perform the Pixelworks. In addition to that, PT Bank is 1.42 times more volatile than Pixelworks. It trades about 0.0 of its total potential returns per unit of risk. Pixelworks is currently generating about 0.03 per unit of volatility. If you would invest 78.00 in Pixelworks on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Pixelworks or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Pixelworks
Performance |
| Timeline |
| PT Bank Rakyat |
| Pixelworks |
PT Bank and Pixelworks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Pixelworks
The main advantage of trading using opposite PT Bank and Pixelworks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Pixelworks 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 Pixelworks will offset losses from the drop in Pixelworks' long position.The idea behind PT Bank Rakyat and Pixelworks 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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