Correlation Between PT Bank and Viad Corp

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Can any of the company-specific risk be diversified away by investing in both PT Bank and Viad Corp 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 Viad Corp 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 Viad Corp, you can compare the effects of market volatilities on PT Bank and Viad Corp 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 Viad Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Viad Corp.

Diversification Opportunities for PT Bank and Viad Corp

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between BKRKF and Viad is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Viad Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viad Corp 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 Viad Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viad Corp has no effect on the direction of PT Bank i.e., PT Bank and Viad Corp go up and down completely randomly.

Pair Corralation between PT Bank and Viad Corp

Assuming the 90 days horizon PT Bank Rakyat is expected to generate 5.89 times more return on investment than Viad Corp. However, PT Bank is 5.89 times more volatile than Viad Corp. It trades about 0.02 of its potential returns per unit of risk. Viad Corp is currently generating about -0.3 per unit of risk. If you would invest  23.00  in PT Bank Rakyat on November 1, 2024 and sell it today you would lose (1.00) from holding PT Bank Rakyat or give up 4.35% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy78.95%
ValuesDaily Returns

PT Bank Rakyat  vs.  Viad Corp

 Performance 
       Timeline  
PT Bank Rakyat 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days PT Bank Rakyat has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
Viad Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Insignificant
Over the last 90 days Viad Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly uncertain basic indicators, Viad Corp may actually be approaching a critical reversion point that can send shares even higher in March 2025.

PT Bank and Viad Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PT Bank and Viad Corp

The main advantage of trading using opposite PT Bank and Viad Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Viad Corp 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 Viad Corp will offset losses from the drop in Viad Corp's long position.
The idea behind PT Bank Rakyat and Viad Corp 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.
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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