Correlation Between PT Bank and NEW MILLENNIUM
Can any of the company-specific risk be diversified away by investing in both PT Bank and NEW MILLENNIUM 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 NEW MILLENNIUM 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 NEW MILLENNIUM IRON, you can compare the effects of market volatilities on PT Bank and NEW MILLENNIUM 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 NEW MILLENNIUM. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and NEW MILLENNIUM.
Diversification Opportunities for PT Bank and NEW MILLENNIUM
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BYRA and NEW is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and NEW MILLENNIUM IRON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW MILLENNIUM IRON 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 NEW MILLENNIUM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW MILLENNIUM IRON has no effect on the direction of PT Bank i.e., PT Bank and NEW MILLENNIUM go up and down completely randomly.
Pair Corralation between PT Bank and NEW MILLENNIUM
Assuming the 90 days trading horizon PT Bank Rakyat is expected to generate 2.21 times more return on investment than NEW MILLENNIUM. However, PT Bank is 2.21 times more volatile than NEW MILLENNIUM IRON. It trades about 0.2 of its potential returns per unit of risk. NEW MILLENNIUM IRON is currently generating about 0.08 per unit of risk. If you would invest 23.00 in PT Bank Rakyat on October 25, 2024 and sell it today you would earn a total of 4.00 from holding PT Bank Rakyat or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. NEW MILLENNIUM IRON
Performance |
| Timeline |
| PT Bank Rakyat |
| NEW MILLENNIUM IRON |
PT Bank and NEW MILLENNIUM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and NEW MILLENNIUM
The main advantage of trading using opposite PT Bank and NEW MILLENNIUM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, NEW MILLENNIUM 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 NEW MILLENNIUM will offset losses from the drop in NEW MILLENNIUM's long position.| PT Bank vs. CHIBA BANK | PT Bank vs. Scottish Mortgage Investment | PT Bank vs. AOYAMA TRADING | PT Bank vs. VIRGIN WINES UK |
| NEW MILLENNIUM vs. Charter Communications | NEW MILLENNIUM vs. Spirent Communications plc | NEW MILLENNIUM vs. HELIOS TECHS INC | NEW MILLENNIUM vs. AAC TECHNOLOGHLDGADR |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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