Correlation Between PT Bank and Illumina
Can any of the company-specific risk be diversified away by investing in both PT Bank and Illumina 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 Illumina 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 Illumina, you can compare the effects of market volatilities on PT Bank and Illumina 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 Illumina. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Illumina.
Diversification Opportunities for PT Bank and Illumina
Very good diversification
The 3 months correlation between BOZA and Illumina is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Maybank and Illumina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Illumina 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 Illumina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Illumina has no effect on the direction of PT Bank i.e., PT Bank and Illumina go up and down completely randomly.
Pair Corralation between PT Bank and Illumina
Assuming the 90 days trading horizon PT Bank is expected to generate 1.81 times less return on investment than Illumina. In addition to that, PT Bank is 2.29 times more volatile than Illumina. It trades about 0.03 of its total potential returns per unit of risk. Illumina is currently generating about 0.11 per unit of volatility. If you would invest 9,756 in Illumina on September 3, 2024 and sell it today you would earn a total of 3,816 from holding Illumina or generate 39.11% 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. Illumina
Performance |
| Timeline |
| PT Bank Maybank |
| Illumina |
PT Bank and Illumina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Illumina
The main advantage of trading using opposite PT Bank and Illumina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Illumina 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 Illumina will offset losses from the drop in Illumina's long position.| PT Bank vs. Iridium Communications | PT Bank vs. Gamma Communications plc | PT Bank vs. Ming Le Sports | PT Bank vs. Jacquet Metal Service |
| Illumina vs. WT OFFSHORE | Illumina vs. PLAYTIKA HOLDING DL 01 | Illumina vs. JD SPORTS FASH | Illumina vs. EIDESVIK OFFSHORE NK |
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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