Correlation Between PT Bank and Wireless Telecom
Can any of the company-specific risk be diversified away by investing in both PT Bank and Wireless Telecom 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 Wireless Telecom 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 Wireless Telecom Group, you can compare the effects of market volatilities on PT Bank and Wireless Telecom 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 Wireless Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Wireless Telecom.
Diversification Opportunities for PT Bank and Wireless Telecom
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BKRKF and Wireless is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Wireless Telecom Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wireless Telecom 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 Wireless Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wireless Telecom has no effect on the direction of PT Bank i.e., PT Bank and Wireless Telecom go up and down completely randomly.
Pair Corralation between PT Bank and Wireless Telecom
Assuming the 90 days horizon PT Bank is expected to generate 1.34 times less return on investment than Wireless Telecom. In addition to that, PT Bank is 1.83 times more volatile than Wireless Telecom Group. It trades about 0.03 of its total potential returns per unit of risk. Wireless Telecom Group is currently generating about 0.06 per unit of volatility. If you would invest 168.00 in Wireless Telecom Group on September 2, 2024 and sell it today you would earn a total of 43.00 from holding Wireless Telecom Group or generate 25.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 37.68% |
| Values | Daily Returns |
PT Bank Rakyat vs. Wireless Telecom Group
Performance |
| Timeline |
| PT Bank Rakyat |
| Wireless Telecom |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PT Bank and Wireless Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Wireless Telecom
The main advantage of trading using opposite PT Bank and Wireless Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Wireless Telecom 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 Wireless Telecom will offset losses from the drop in Wireless Telecom's long position.The idea behind PT Bank Rakyat and Wireless Telecom Group 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.| Wireless Telecom vs. Mobilicom Limited Warrants | Wireless Telecom vs. Siyata Mobile | Wireless Telecom vs. SatixFy Communications | Wireless Telecom vs. Actelis Networks |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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