Correlation Between PT Bank and Tamarack Valley
Can any of the company-specific risk be diversified away by investing in both PT Bank and Tamarack Valley 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 Tamarack Valley 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 Tamarack Valley Energy, you can compare the effects of market volatilities on PT Bank and Tamarack Valley 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 Tamarack Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Tamarack Valley.
Diversification Opportunities for PT Bank and Tamarack Valley
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BKRKF and Tamarack is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Tamarack Valley Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamarack Valley Energy 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 Tamarack Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamarack Valley Energy has no effect on the direction of PT Bank i.e., PT Bank and Tamarack Valley go up and down completely randomly.
Pair Corralation between PT Bank and Tamarack Valley
Assuming the 90 days horizon PT Bank Rakyat is expected to under-perform the Tamarack Valley. In addition to that, PT Bank is 3.31 times more volatile than Tamarack Valley Energy. It trades about -0.02 of its total potential returns per unit of risk. Tamarack Valley Energy is currently generating about 0.25 per unit of volatility. If you would invest 280.00 in Tamarack Valley Energy on August 29, 2024 and sell it today you would earn a total of 38.00 from holding Tamarack Valley Energy or generate 13.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Tamarack Valley Energy
Performance |
| Timeline |
| PT Bank Rakyat |
| Tamarack Valley Energy |
PT Bank and Tamarack Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Tamarack Valley
The main advantage of trading using opposite PT Bank and Tamarack Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Tamarack Valley 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 Tamarack Valley will offset losses from the drop in Tamarack Valley'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 |
| Tamarack Valley vs. Yamaha Motor Co | Tamarack Valley vs. Nitto Denko Corp | Tamarack Valley vs. Farmers Merchants Bancorp | Tamarack Valley vs. Furukawa Electric Co |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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