Correlation Between PT Bank and Casio Computer
Can any of the company-specific risk be diversified away by investing in both PT Bank and Casio Computer 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 Casio Computer 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 Casio Computer CoLtd, you can compare the effects of market volatilities on PT Bank and Casio Computer 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 Casio Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Casio Computer.
Diversification Opportunities for PT Bank and Casio Computer
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BYRA and Casio is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Casio Computer CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casio Computer CoLtd 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 Casio Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casio Computer CoLtd has no effect on the direction of PT Bank i.e., PT Bank and Casio Computer go up and down completely randomly.
Pair Corralation between PT Bank and Casio Computer
Assuming the 90 days trading horizon PT Bank Rakyat is expected to generate 5.54 times more return on investment than Casio Computer. However, PT Bank is 5.54 times more volatile than Casio Computer CoLtd. It trades about 0.09 of its potential returns per unit of risk. Casio Computer CoLtd is currently generating about 0.02 per unit of risk. If you would invest 24.00 in PT Bank Rakyat on November 3, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Casio Computer CoLtd
Performance |
| Timeline |
| PT Bank Rakyat |
| Casio Computer CoLtd |
PT Bank and Casio Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Casio Computer
The main advantage of trading using opposite PT Bank and Casio Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Casio Computer 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 Casio Computer will offset losses from the drop in Casio Computer's long position.| PT Bank vs. FUYO GENERAL LEASE | PT Bank vs. VARIOUS EATERIES LS | PT Bank vs. US FOODS HOLDING | PT Bank vs. Lifeway Foods |
| Casio Computer vs. Apple Inc | Casio Computer vs. Samsung Electronics Co | Casio Computer vs. Samsung Electronics Co | Casio Computer vs. Sony Group Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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