Correlation Between PT Bank and ENN Energy
Can any of the company-specific risk be diversified away by investing in both PT Bank and ENN Energy 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 ENN Energy 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 ENN Energy Holdings, you can compare the effects of market volatilities on PT Bank and ENN Energy 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 ENN Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and ENN Energy.
Diversification Opportunities for PT Bank and ENN Energy
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BOZA and ENN is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Maybank and ENN Energy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENN Energy Holdings 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 ENN Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENN Energy Holdings has no effect on the direction of PT Bank i.e., PT Bank and ENN Energy go up and down completely randomly.
Pair Corralation between PT Bank and ENN Energy
Assuming the 90 days trading horizon PT Bank is expected to generate 5.28 times less return on investment than ENN Energy. But when comparing it to its historical volatility, PT Bank Maybank is 1.37 times less risky than ENN Energy. It trades about 0.02 of its potential returns per unit of risk. ENN Energy Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 645.00 in ENN Energy Holdings on September 12, 2024 and sell it today you would earn a total of 30.00 from holding ENN Energy Holdings or generate 4.65% 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. ENN Energy Holdings
Performance |
| Timeline |
| PT Bank Maybank |
| ENN Energy Holdings |
PT Bank and ENN Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and ENN Energy
The main advantage of trading using opposite PT Bank and ENN Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, ENN Energy 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 ENN Energy will offset losses from the drop in ENN Energy's long position.| PT Bank vs. China Merchants Bank | PT Bank vs. HDFC Bank Limited | PT Bank vs. ICICI Bank Limited | PT Bank vs. PT Bank Central |
| ENN Energy vs. MIRAMAR HOTEL INV | ENN Energy vs. INTERCONT HOTELS | ENN Energy vs. International Game Technology | ENN Energy vs. GigaMedia |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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