Correlation Between PT Bank and SPDR Gold
Can any of the company-specific risk be diversified away by investing in both PT Bank and SPDR Gold 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 SPDR Gold 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 SPDR Gold Shares, you can compare the effects of market volatilities on PT Bank and SPDR Gold 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 SPDR Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and SPDR Gold.
Diversification Opportunities for PT Bank and SPDR Gold
Very good diversification
The 3 months correlation between BYRA and SPDR is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and SPDR Gold Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Gold Shares 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 SPDR Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Gold Shares has no effect on the direction of PT Bank i.e., PT Bank and SPDR Gold go up and down completely randomly.
Pair Corralation between PT Bank and SPDR Gold
Assuming the 90 days trading horizon PT Bank Rakyat is expected to under-perform the SPDR Gold. In addition to that, PT Bank is 1.85 times more volatile than SPDR Gold Shares. It trades about -0.14 of its total potential returns per unit of risk. SPDR Gold Shares is currently generating about -0.02 per unit of volatility. If you would invest 23,305 in SPDR Gold Shares on September 2, 2024 and sell it today you would lose (158.00) from holding SPDR Gold Shares or give up 0.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. SPDR Gold Shares
Performance |
| Timeline |
| PT Bank Rakyat |
| SPDR Gold Shares |
PT Bank and SPDR Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and SPDR Gold
The main advantage of trading using opposite PT Bank and SPDR Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, SPDR Gold 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 SPDR Gold will offset losses from the drop in SPDR Gold's long position.| PT Bank vs. Fast Retailing Co | PT Bank vs. Casio Computer CoLtd | PT Bank vs. JIAHUA STORES | PT Bank vs. BJs Wholesale Club |
| SPDR Gold vs. Summit Materials | SPDR Gold vs. Rayonier Advanced Materials | SPDR Gold vs. Applied Materials | SPDR Gold vs. EAGLE MATERIALS |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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