Correlation Between PT Bank and River Financial
Can any of the company-specific risk be diversified away by investing in both PT Bank and River Financial 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 River Financial 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 River Financial, you can compare the effects of market volatilities on PT Bank and River Financial 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 River Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and River Financial.
Diversification Opportunities for PT Bank and River Financial
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between BKRKF and River is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and River Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on River Financial 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 River Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of River Financial has no effect on the direction of PT Bank i.e., PT Bank and River Financial go up and down completely randomly.
Pair Corralation between PT Bank and River Financial
Assuming the 90 days horizon PT Bank Rakyat is expected to generate 11.34 times more return on investment than River Financial. However, PT Bank is 11.34 times more volatile than River Financial. It trades about 0.02 of its potential returns per unit of risk. River Financial is currently generating about 0.0 per unit of risk. If you would invest 31.00 in PT Bank Rakyat on September 14, 2024 and sell it today you would lose (5.00) from holding PT Bank Rakyat or give up 16.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.56% |
| Values | Daily Returns |
PT Bank Rakyat vs. River Financial
Performance |
| Timeline |
| PT Bank Rakyat |
| River Financial |
PT Bank and River Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and River Financial
The main advantage of trading using opposite PT Bank and River Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, River Financial 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 River Financial will offset losses from the drop in River Financial'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 |
| River Financial vs. PT Bank Rakyat | River Financial vs. Morningstar Unconstrained Allocation | River Financial vs. Bondbloxx ETF Trust | River Financial vs. Spring Valley Acquisition |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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