Correlation Between PT Bank and SANUWAVE Health
Can any of the company-specific risk be diversified away by investing in both PT Bank and SANUWAVE Health 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 SANUWAVE Health 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 SANUWAVE Health, you can compare the effects of market volatilities on PT Bank and SANUWAVE Health 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 SANUWAVE Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and SANUWAVE Health.
Diversification Opportunities for PT Bank and SANUWAVE Health
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BKRKF and SANUWAVE is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and SANUWAVE Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANUWAVE Health 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 SANUWAVE Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANUWAVE Health has no effect on the direction of PT Bank i.e., PT Bank and SANUWAVE Health go up and down completely randomly.
Pair Corralation between PT Bank and SANUWAVE Health
Assuming the 90 days horizon PT Bank Rakyat is expected to under-perform the SANUWAVE Health. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Bank Rakyat is 1.45 times less risky than SANUWAVE Health. The pink sheet trades about -0.07 of its potential returns per unit of risk. The SANUWAVE Health is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 559.00 in SANUWAVE Health on September 2, 2024 and sell it today you would earn a total of 1,541 from holding SANUWAVE Health or generate 275.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. SANUWAVE Health
Performance |
| Timeline |
| PT Bank Rakyat |
| SANUWAVE Health |
PT Bank and SANUWAVE Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and SANUWAVE Health
The main advantage of trading using opposite PT Bank and SANUWAVE Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, SANUWAVE Health 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 SANUWAVE Health will offset losses from the drop in SANUWAVE Health's long position.The idea behind PT Bank Rakyat and SANUWAVE Health 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.| SANUWAVE Health vs. Brainsway | SANUWAVE Health vs. Venus Concept | SANUWAVE Health vs. Tactile Systems Technology | SANUWAVE Health vs. Icecure Medical |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |