Correlation Between PT Bank and TRIP GROUP
Can any of the company-specific risk be diversified away by investing in both PT Bank and TRIP GROUP 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 TRIP GROUP 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 TRIPCOM GROUP DL 00125, you can compare the effects of market volatilities on PT Bank and TRIP GROUP 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 TRIP GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and TRIP GROUP.
Diversification Opportunities for PT Bank and TRIP GROUP
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BYRA and TRIP is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and TRIPCOM GROUP DL 00125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRIPCOM GROUP DL 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 TRIP GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRIPCOM GROUP DL has no effect on the direction of PT Bank i.e., PT Bank and TRIP GROUP go up and down completely randomly.
Pair Corralation between PT Bank and TRIP GROUP
Assuming the 90 days trading horizon PT Bank is expected to generate 1.18 times less return on investment than TRIP GROUP. In addition to that, PT Bank is 1.63 times more volatile than TRIPCOM GROUP DL 00125. It trades about 0.02 of its total potential returns per unit of risk. TRIPCOM GROUP DL 00125 is currently generating about 0.05 per unit of volatility. If you would invest 3,620 in TRIPCOM GROUP DL 00125 on August 31, 2024 and sell it today you would earn a total of 2,336 from holding TRIPCOM GROUP DL 00125 or generate 64.53% 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. TRIPCOM GROUP DL 00125
Performance |
| Timeline |
| PT Bank Rakyat |
| TRIPCOM GROUP DL |
PT Bank and TRIP GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and TRIP GROUP
The main advantage of trading using opposite PT Bank and TRIP GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, TRIP GROUP 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 TRIP GROUP will offset losses from the drop in TRIP GROUP's long position.| PT Bank vs. China Merchants Bank | PT Bank vs. PT Bank Central | PT Bank vs. State Bank of | PT Bank vs. Mizuho Financial Group |
| TRIP GROUP vs. Science Applications International | TRIP GROUP vs. DATAGROUP SE | TRIP GROUP vs. ALERION CLEANPOWER | TRIP GROUP vs. TERADATA |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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