Correlation Between PT Bank and CHEMICAL INDUSTRIES
Can any of the company-specific risk be diversified away by investing in both PT Bank and CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES, you can compare the effects of market volatilities on PT Bank and CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and CHEMICAL INDUSTRIES.
Diversification Opportunities for PT Bank and CHEMICAL INDUSTRIES
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BOZA and CHEMICAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Maybank and CHEMICAL INDUSTRIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHEMICAL INDUSTRIES has no effect on the direction of PT Bank i.e., PT Bank and CHEMICAL INDUSTRIES go up and down completely randomly.
Pair Corralation between PT Bank and CHEMICAL INDUSTRIES
If you would invest 1.35 in PT Bank Maybank on September 2, 2024 and sell it today you would lose (0.05) from holding PT Bank Maybank or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.48% |
| Values | Daily Returns |
PT Bank Maybank vs. CHEMICAL INDUSTRIES
Performance |
| Timeline |
| PT Bank Maybank |
| CHEMICAL INDUSTRIES |
PT Bank and CHEMICAL INDUSTRIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and CHEMICAL INDUSTRIES
The main advantage of trading using opposite PT Bank and CHEMICAL INDUSTRIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES will offset losses from the drop in CHEMICAL INDUSTRIES's long position.The idea behind PT Bank Maybank and CHEMICAL INDUSTRIES 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.| CHEMICAL INDUSTRIES vs. SIVERS SEMICONDUCTORS AB | CHEMICAL INDUSTRIES vs. Darden Restaurants | CHEMICAL INDUSTRIES vs. Reliance Steel Aluminum | CHEMICAL INDUSTRIES vs. Q2M Managementberatung AG |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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