Correlation Between PT Bank and VIRG NATL
Can any of the company-specific risk be diversified away by investing in both PT Bank and VIRG NATL 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 VIRG NATL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Maybank and VIRG NATL BANKSH, you can compare the effects of market volatilities on PT Bank and VIRG NATL 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 VIRG NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and VIRG NATL.
Diversification Opportunities for PT Bank and VIRG NATL
Very good diversification
The 3 months correlation between BOZA and VIRG is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Maybank and VIRG NATL BANKSH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIRG NATL BANKSH 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 Maybank are associated (or correlated) with VIRG NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIRG NATL BANKSH has no effect on the direction of PT Bank i.e., PT Bank and VIRG NATL go up and down completely randomly.
Pair Corralation between PT Bank and VIRG NATL
Assuming the 90 days trading horizon PT Bank is expected to generate 6.47 times less return on investment than VIRG NATL. In addition to that, PT Bank is 1.25 times more volatile than VIRG NATL BANKSH. It trades about 0.02 of its total potential returns per unit of risk. VIRG NATL BANKSH is currently generating about 0.14 per unit of volatility. If you would invest 3,600 in VIRG NATL BANKSH on September 1, 2024 and sell it today you would earn a total of 320.00 from holding VIRG NATL BANKSH or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Maybank vs. VIRG NATL BANKSH
Performance |
| Timeline |
| PT Bank Maybank |
| VIRG NATL BANKSH |
PT Bank and VIRG NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and VIRG NATL
The main advantage of trading using opposite PT Bank and VIRG NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, VIRG NATL 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 VIRG NATL will offset losses from the drop in VIRG NATL's long position.| PT Bank vs. NIPPON STEEL SPADR | PT Bank vs. Perma Fix Environmental Services | PT Bank vs. MITSUBISHI STEEL MFG | PT Bank vs. SIDETRADE EO 1 |
| VIRG NATL vs. Strategic Education | VIRG NATL vs. Verizon Communications | VIRG NATL vs. SK TELECOM TDADR | VIRG NATL vs. EEDUCATION ALBERT AB |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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