Correlation Between Bank Permata and Tira Austenite
Can any of the company-specific risk be diversified away by investing in both Bank Permata and Tira Austenite 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 Bank Permata and Tira Austenite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Permata Tbk and Tira Austenite Tbk, you can compare the effects of market volatilities on Bank Permata and Tira Austenite 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 Bank Permata with a short position of Tira Austenite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Permata and Tira Austenite.
Diversification Opportunities for Bank Permata and Tira Austenite
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Tira is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bank Permata Tbk and Tira Austenite Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tira Austenite Tbk and Bank Permata 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 Bank Permata Tbk are associated (or correlated) with Tira Austenite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tira Austenite Tbk has no effect on the direction of Bank Permata i.e., Bank Permata and Tira Austenite go up and down completely randomly.
Pair Corralation between Bank Permata and Tira Austenite
Assuming the 90 days trading horizon Bank Permata Tbk is expected to under-perform the Tira Austenite. In addition to that, Bank Permata is 1.14 times more volatile than Tira Austenite Tbk. It trades about -0.3 of its total potential returns per unit of risk. Tira Austenite Tbk is currently generating about 0.03 per unit of volatility. If you would invest 48,800 in Tira Austenite Tbk on September 3, 2024 and sell it today you would earn a total of 400.00 from holding Tira Austenite Tbk or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Permata Tbk vs. Tira Austenite Tbk
Performance |
| Timeline |
| Bank Permata Tbk |
| Tira Austenite Tbk |
Bank Permata and Tira Austenite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Permata and Tira Austenite
The main advantage of trading using opposite Bank Permata and Tira Austenite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Permata position performs unexpectedly, Tira Austenite 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 Tira Austenite will offset losses from the drop in Tira Austenite's long position.| Bank Permata vs. Bank Cimb Niaga | Bank Permata vs. Bank Maybank Indonesia | Bank Permata vs. Bank Danamon Indonesia | Bank Permata vs. Bank Pan Indonesia |
| Tira Austenite vs. Tigaraksa Satria Tbk | Tira Austenite vs. Wicaksana Overseas International | Tira Austenite vs. Wahana Pronatural | Tira Austenite vs. Millennium Pharmacon International |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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