Correlation Between PT Bank and Hercules Capital
Can any of the company-specific risk be diversified away by investing in both PT Bank and Hercules Capital 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 Hercules Capital 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 Hercules Capital, you can compare the effects of market volatilities on PT Bank and Hercules Capital 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 Hercules Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Hercules Capital.
Diversification Opportunities for PT Bank and Hercules Capital
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BYRA and Hercules is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Hercules Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hercules Capital 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 Hercules Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hercules Capital has no effect on the direction of PT Bank i.e., PT Bank and Hercules Capital go up and down completely randomly.
Pair Corralation between PT Bank and Hercules Capital
Assuming the 90 days trading horizon PT Bank Rakyat is expected to generate 3.18 times more return on investment than Hercules Capital. However, PT Bank is 3.18 times more volatile than Hercules Capital. It trades about 0.02 of its potential returns per unit of risk. Hercules Capital is currently generating about 0.07 per unit of risk. If you would invest 27.00 in PT Bank Rakyat on October 14, 2024 and sell it today you would lose (3.00) from holding PT Bank Rakyat or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Hercules Capital
Performance |
| Timeline |
| PT Bank Rakyat |
| Hercules Capital |
PT Bank and Hercules Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Hercules Capital
The main advantage of trading using opposite PT Bank and Hercules Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Hercules Capital 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 Hercules Capital will offset losses from the drop in Hercules Capital's long position.| PT Bank vs. EEDUCATION ALBERT AB | PT Bank vs. TOWNSQUARE MEDIA INC | PT Bank vs. Adtalem Global Education | PT Bank vs. Tencent Music Entertainment |
| Hercules Capital vs. SALESFORCE INC CDR | Hercules Capital vs. ASURE SOFTWARE | Hercules Capital vs. Take Two Interactive Software | Hercules Capital vs. AXWAY SOFTWARE EO |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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