Correlation Between PT Bank and Resona Holdings
Can any of the company-specific risk be diversified away by investing in both PT Bank and Resona Holdings 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 Resona Holdings 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 Resona Holdings, you can compare the effects of market volatilities on PT Bank and Resona Holdings 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 Resona Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Resona Holdings.
Diversification Opportunities for PT Bank and Resona Holdings
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BYRA and Resona is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Resona Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resona Holdings 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 Resona Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resona Holdings has no effect on the direction of PT Bank i.e., PT Bank and Resona Holdings go up and down completely randomly.
Pair Corralation between PT Bank and Resona Holdings
Assuming the 90 days trading horizon PT Bank Rakyat is expected to under-perform the Resona Holdings. In addition to that, PT Bank is 5.44 times more volatile than Resona Holdings. It trades about -0.08 of its total potential returns per unit of risk. Resona Holdings is currently generating about 0.48 per unit of volatility. If you would invest 680.00 in Resona Holdings on November 27, 2024 and sell it today you would earn a total of 95.00 from holding Resona Holdings or generate 13.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Resona Holdings
Performance |
| Timeline |
| PT Bank Rakyat |
| Resona Holdings |
PT Bank and Resona Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Resona Holdings
The main advantage of trading using opposite PT Bank and Resona Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Resona Holdings 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 Resona Holdings will offset losses from the drop in Resona Holdings' long position.| PT Bank vs. CanSino Biologics | PT Bank vs. CyberArk Software | PT Bank vs. Sqs Software Quality | PT Bank vs. Constellation Software |
| Resona Holdings vs. PKSHA TECHNOLOGY INC | Resona Holdings vs. Easy Software AG | Resona Holdings vs. GLG LIFE TECH | Resona Holdings vs. GAZTRTECHNIUADR15EO01 |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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