Correlation Between PT Bank and Capitol Federal
Can any of the company-specific risk be diversified away by investing in both PT Bank and Capitol Federal 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 Capitol Federal 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 Capitol Federal Financial, you can compare the effects of market volatilities on PT Bank and Capitol Federal 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 Capitol Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Capitol Federal.
Diversification Opportunities for PT Bank and Capitol Federal
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BYRA and Capitol is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Capitol Federal Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitol Federal Financial 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 Capitol Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitol Federal Financial has no effect on the direction of PT Bank i.e., PT Bank and Capitol Federal go up and down completely randomly.
Pair Corralation between PT Bank and Capitol Federal
Assuming the 90 days trading horizon PT Bank Rakyat is expected to under-perform the Capitol Federal. In addition to that, PT Bank is 1.15 times more volatile than Capitol Federal Financial. It trades about -0.21 of its total potential returns per unit of risk. Capitol Federal Financial is currently generating about -0.06 per unit of volatility. If you would invest 630.00 in Capitol Federal Financial on September 10, 2024 and sell it today you would lose (20.00) from holding Capitol Federal Financial or give up 3.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Capitol Federal Financial
Performance |
| Timeline |
| PT Bank Rakyat |
| Capitol Federal Financial |
PT Bank and Capitol Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Capitol Federal
The main advantage of trading using opposite PT Bank and Capitol Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Capitol Federal 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 Capitol Federal will offset losses from the drop in Capitol Federal's long position.| PT Bank vs. Computer And Technologies | PT Bank vs. PKSHA TECHNOLOGY INC | PT Bank vs. SCOTT TECHNOLOGY | PT Bank vs. Sunny Optical Technology |
| Capitol Federal vs. DIVERSIFIED ROYALTY | Capitol Federal vs. New Residential Investment | Capitol Federal vs. JSC Halyk bank | Capitol Federal vs. JAPAN TOBACCO UNSPADR12 |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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