Correlation Between PT Bank and ASML Holding
Can any of the company-specific risk be diversified away by investing in both PT Bank and ASML Holding 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 ASML Holding 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 ASML Holding NV, you can compare the effects of market volatilities on PT Bank and ASML Holding 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 ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and ASML Holding.
Diversification Opportunities for PT Bank and ASML Holding
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BYRA and ASML is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and ASML Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML Holding NV 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 ASML Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASML Holding NV has no effect on the direction of PT Bank i.e., PT Bank and ASML Holding go up and down completely randomly.
Pair Corralation between PT Bank and ASML Holding
Assuming the 90 days trading horizon PT Bank Rakyat is expected to generate 2.31 times more return on investment than ASML Holding. However, PT Bank is 2.31 times more volatile than ASML Holding NV. It trades about 0.09 of its potential returns per unit of risk. ASML Holding NV is currently generating about 0.06 per unit of risk. If you would invest 24.00 in PT Bank Rakyat on November 4, 2024 and sell it today you would earn a total of 2.00 from holding PT Bank Rakyat or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. ASML Holding NV
Performance |
| Timeline |
| PT Bank Rakyat |
| ASML Holding NV |
PT Bank and ASML Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and ASML Holding
The main advantage of trading using opposite PT Bank and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, ASML Holding 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 ASML Holding will offset losses from the drop in ASML Holding's long position.| PT Bank vs. Genertec Universal Medical | PT Bank vs. ONWARD MEDICAL BV | PT Bank vs. UNITED UTILITIES GR | PT Bank vs. Diamyd Medical AB |
| ASML Holding vs. GALENA MINING LTD | ASML Holding vs. Geely Automobile Holdings | ASML Holding vs. Samsung Electronics Co | ASML Holding vs. Zijin Mining Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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