Correlation Between PT Bank and ARISTOCRAT LEISURE
Can any of the company-specific risk be diversified away by investing in both PT Bank and ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE, you can compare the effects of market volatilities on PT Bank and ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and ARISTOCRAT LEISURE.
Diversification Opportunities for PT Bank and ARISTOCRAT LEISURE
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BYRA and ARISTOCRAT is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and ARISTOCRAT LEISURE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARISTOCRAT LEISURE has no effect on the direction of PT Bank i.e., PT Bank and ARISTOCRAT LEISURE go up and down completely randomly.
Pair Corralation between PT Bank and ARISTOCRAT LEISURE
Assuming the 90 days trading horizon PT Bank is expected to generate 1.35 times less return on investment than ARISTOCRAT LEISURE. In addition to that, PT Bank is 5.35 times more volatile than ARISTOCRAT LEISURE. It trades about 0.02 of its total potential returns per unit of risk. ARISTOCRAT LEISURE is currently generating about 0.14 per unit of volatility. If you would invest 2,092 in ARISTOCRAT LEISURE on October 19, 2024 and sell it today you would earn a total of 2,188 from holding ARISTOCRAT LEISURE or generate 104.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. ARISTOCRAT LEISURE
Performance |
| Timeline |
| PT Bank Rakyat |
| ARISTOCRAT LEISURE |
PT Bank and ARISTOCRAT LEISURE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and ARISTOCRAT LEISURE
The main advantage of trading using opposite PT Bank and ARISTOCRAT LEISURE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE will offset losses from the drop in ARISTOCRAT LEISURE's long position.| PT Bank vs. Charter Communications | PT Bank vs. GLG LIFE TECH | PT Bank vs. BioNTech SE | PT Bank vs. Telecom Argentina SA |
| ARISTOCRAT LEISURE vs. FORWARD AIR P | ARISTOCRAT LEISURE vs. Westinghouse Air Brake | ARISTOCRAT LEISURE vs. SOGECLAIR SA INH | ARISTOCRAT LEISURE vs. Reinsurance Group of |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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