Correlation Between PT Bank and CryoLife
Can any of the company-specific risk be diversified away by investing in both PT Bank and CryoLife 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 CryoLife 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 CryoLife, you can compare the effects of market volatilities on PT Bank and CryoLife 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 CryoLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and CryoLife.
Diversification Opportunities for PT Bank and CryoLife
Excellent diversification
The 3 months correlation between BYRA and CryoLife is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and CryoLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CryoLife 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 CryoLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CryoLife has no effect on the direction of PT Bank i.e., PT Bank and CryoLife go up and down completely randomly.
Pair Corralation between PT Bank and CryoLife
Assuming the 90 days trading horizon PT Bank Rakyat is expected to under-perform the CryoLife. In addition to that, PT Bank is 1.22 times more volatile than CryoLife. It trades about -0.2 of its total potential returns per unit of risk. CryoLife is currently generating about 0.27 per unit of volatility. If you would invest 2,435 in CryoLife on August 30, 2024 and sell it today you would earn a total of 285.00 from holding CryoLife or generate 11.7% 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. CryoLife
Performance |
| Timeline |
| PT Bank Rakyat |
| CryoLife |
PT Bank and CryoLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and CryoLife
The main advantage of trading using opposite PT Bank and CryoLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, CryoLife 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 CryoLife will offset losses from the drop in CryoLife's long position.| PT Bank vs. QURATE RETAIL INC | PT Bank vs. COSTCO WHOLESALE CDR | PT Bank vs. MITSUBISHI STEEL MFG | PT Bank vs. Lion One Metals |
| CryoLife vs. SPORTING | CryoLife vs. Fukuyama Transporting Co | CryoLife vs. Computershare Limited | CryoLife vs. China Communications Services |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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