Correlation Between PT Bank and Risk George
Can any of the company-specific risk be diversified away by investing in both PT Bank and Risk George 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 Risk George 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 Risk George Inds, you can compare the effects of market volatilities on PT Bank and Risk George 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 Risk George. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Risk George.
Diversification Opportunities for PT Bank and Risk George
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BKRKF and Risk is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Risk George Inds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Risk George Inds 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 Risk George. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Risk George Inds has no effect on the direction of PT Bank i.e., PT Bank and Risk George go up and down completely randomly.
Pair Corralation between PT Bank and Risk George
Assuming the 90 days horizon PT Bank Rakyat is expected to generate 3.87 times more return on investment than Risk George. However, PT Bank is 3.87 times more volatile than Risk George Inds. It trades about 0.04 of its potential returns per unit of risk. Risk George Inds is currently generating about 0.08 per unit of risk. If you would invest 24.00 in PT Bank Rakyat on October 23, 2024 and sell it today you would earn a total of 0.00 from holding PT Bank Rakyat or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Risk George Inds
Performance |
| Timeline |
| PT Bank Rakyat |
| Risk George Inds |
PT Bank and Risk George Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Risk George
The main advantage of trading using opposite PT Bank and Risk George positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Risk George 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 Risk George will offset losses from the drop in Risk George'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 |
| Risk George vs. Brinks Company | Risk George vs. MSA Safety | Risk George vs. Resideo Technologies | Risk George vs. Allegion PLC |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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