Correlation Between PT Bank and Fiverr International
Can any of the company-specific risk be diversified away by investing in both PT Bank and Fiverr International 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 Fiverr International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Rakyat and Fiverr International, you can compare the effects of market volatilities on PT Bank and Fiverr International 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 Fiverr International. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Fiverr International.
Diversification Opportunities for PT Bank and Fiverr International
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BYRA and Fiverr is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Fiverr International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiverr International 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 Rakyat are associated (or correlated) with Fiverr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiverr International has no effect on the direction of PT Bank i.e., PT Bank and Fiverr International go up and down completely randomly.
Pair Corralation between PT Bank and Fiverr International
Assuming the 90 days trading horizon PT Bank is expected to generate 2.14 times less return on investment than Fiverr International. In addition to that, PT Bank is 1.46 times more volatile than Fiverr International. It trades about 0.01 of its total potential returns per unit of risk. Fiverr International is currently generating about 0.04 per unit of volatility. If you would invest 2,529 in Fiverr International on August 29, 2024 and sell it today you would earn a total of 615.00 from holding Fiverr International or generate 24.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Fiverr International
Performance |
| Timeline |
| PT Bank Rakyat |
| Fiverr International |
PT Bank and Fiverr International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Fiverr International
The main advantage of trading using opposite PT Bank and Fiverr International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Fiverr International 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 Fiverr International will offset losses from the drop in Fiverr International's long position.| PT Bank vs. UNIVMUSIC GRPADR050 | PT Bank vs. VIVA WINE GROUP | PT Bank vs. ITALIAN WINE BRANDS | PT Bank vs. UNIVERSAL MUSIC GROUP |
| Fiverr International vs. Zijin Mining Group | Fiverr International vs. CHINA TONTINE WINES | Fiverr International vs. Jacquet Metal Service | Fiverr International vs. Lamar Advertising |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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