Correlation Between PT Bank and Tcnicas Reunidas
Can any of the company-specific risk be diversified away by investing in both PT Bank and Tcnicas Reunidas 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 Tcnicas Reunidas 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 Tcnicas Reunidas SA, you can compare the effects of market volatilities on PT Bank and Tcnicas Reunidas 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 Tcnicas Reunidas. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Tcnicas Reunidas.
Diversification Opportunities for PT Bank and Tcnicas Reunidas
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BKRKF and Tcnicas is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Tcnicas Reunidas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tcnicas Reunidas 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 Tcnicas Reunidas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tcnicas Reunidas has no effect on the direction of PT Bank i.e., PT Bank and Tcnicas Reunidas go up and down completely randomly.
Pair Corralation between PT Bank and Tcnicas Reunidas
Assuming the 90 days horizon PT Bank Rakyat is expected to generate 2.42 times more return on investment than Tcnicas Reunidas. However, PT Bank is 2.42 times more volatile than Tcnicas Reunidas SA. It trades about 0.02 of its potential returns per unit of risk. Tcnicas Reunidas SA is currently generating about 0.03 per unit of risk. If you would invest 28.00 in PT Bank Rakyat on August 31, 2024 and sell it today you would lose (3.00) from holding PT Bank Rakyat or give up 10.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 81.13% |
| Values | Daily Returns |
PT Bank Rakyat vs. Tcnicas Reunidas SA
Performance |
| Timeline |
| PT Bank Rakyat |
| Tcnicas Reunidas |
PT Bank and Tcnicas Reunidas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Tcnicas Reunidas
The main advantage of trading using opposite PT Bank and Tcnicas Reunidas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Tcnicas Reunidas 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 Tcnicas Reunidas will offset losses from the drop in Tcnicas Reunidas' 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 |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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