Correlation Between PT Bank and TFS FINANCIAL
Can any of the company-specific risk be diversified away by investing in both PT Bank and TFS FINANCIAL 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 TFS FINANCIAL 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 TFS FINANCIAL, you can compare the effects of market volatilities on PT Bank and TFS FINANCIAL 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 TFS FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and TFS FINANCIAL.
Diversification Opportunities for PT Bank and TFS FINANCIAL
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BOZA and TFS is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Maybank and TFS FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFS FINANCIAL 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 TFS FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFS FINANCIAL has no effect on the direction of PT Bank i.e., PT Bank and TFS FINANCIAL go up and down completely randomly.
Pair Corralation between PT Bank and TFS FINANCIAL
Assuming the 90 days trading horizon PT Bank Maybank is expected to under-perform the TFS FINANCIAL. In addition to that, PT Bank is 1.33 times more volatile than TFS FINANCIAL. It trades about -0.09 of its total potential returns per unit of risk. TFS FINANCIAL is currently generating about 0.21 per unit of volatility. If you would invest 1,200 in TFS FINANCIAL on August 30, 2024 and sell it today you would earn a total of 150.00 from holding TFS FINANCIAL or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
PT Bank Maybank vs. TFS FINANCIAL
Performance |
| Timeline |
| PT Bank Maybank |
| TFS FINANCIAL |
PT Bank and TFS FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and TFS FINANCIAL
The main advantage of trading using opposite PT Bank and TFS FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, TFS FINANCIAL 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 TFS FINANCIAL will offset losses from the drop in TFS FINANCIAL's long position.| PT Bank vs. China Merchants Bank | PT Bank vs. PT Bank Central | PT Bank vs. State Bank of | PT Bank vs. PT Bank Rakyat |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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