Correlation Between PT Bank and Viad Corp
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
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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 78.95% |
Values | Daily Returns |
PT Bank Rakyat vs. Viad Corp
Performance |
Timeline |
PT Bank Rakyat |
Viad Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
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.PT Bank vs. First Hawaiian | PT Bank vs. Central Pacific Financial | PT Bank vs. Territorial Bancorp | PT Bank vs. Comerica |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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