Correlation Between PT Bank and World Copper
Can any of the company-specific risk be diversified away by investing in both PT Bank and World Copper 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 World Copper 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 World Copper, you can compare the effects of market volatilities on PT Bank and World Copper 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 World Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and World Copper.
Diversification Opportunities for PT Bank and World Copper
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BKRKF and World is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and World Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Copper 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 World Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Copper has no effect on the direction of PT Bank i.e., PT Bank and World Copper go up and down completely randomly.
Pair Corralation between PT Bank and World Copper
Assuming the 90 days horizon PT Bank Rakyat is expected to under-perform the World Copper. In addition to that, PT Bank is 1.49 times more volatile than World Copper. It trades about -0.08 of its total potential returns per unit of risk. World Copper is currently generating about -0.08 per unit of volatility. If you would invest 6.25 in World Copper on September 3, 2024 and sell it today you would lose (0.55) from holding World Copper or give up 8.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. World Copper
Performance |
| Timeline |
| PT Bank Rakyat |
| World Copper |
PT Bank and World Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and World Copper
The main advantage of trading using opposite PT Bank and World Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, World Copper 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 World Copper will offset losses from the drop in World Copper'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 |
| World Copper vs. Hot Chili Limited | World Copper vs. Three Valley Copper | World Copper vs. Los Andes Copper | World Copper vs. QC Copper and |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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