Correlation Between PT Bank and Hawesko Holding
Can any of the company-specific risk be diversified away by investing in both PT Bank and Hawesko Holding 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 Hawesko Holding 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 Hawesko Holding AG, you can compare the effects of market volatilities on PT Bank and Hawesko Holding 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 Hawesko Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Hawesko Holding.
Diversification Opportunities for PT Bank and Hawesko Holding
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BYRA and Hawesko is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Hawesko Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawesko Holding AG 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 Hawesko Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawesko Holding AG has no effect on the direction of PT Bank i.e., PT Bank and Hawesko Holding go up and down completely randomly.
Pair Corralation between PT Bank and Hawesko Holding
Assuming the 90 days trading horizon PT Bank Rakyat is expected to generate 2.88 times more return on investment than Hawesko Holding. However, PT Bank is 2.88 times more volatile than Hawesko Holding AG. It trades about 0.02 of its potential returns per unit of risk. Hawesko Holding AG is currently generating about -0.04 per unit of risk. If you would invest 28.00 in PT Bank Rakyat on September 12, 2024 and sell it today you would lose (4.00) from holding PT Bank Rakyat or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Hawesko Holding AG
Performance |
| Timeline |
| PT Bank Rakyat |
| Hawesko Holding AG |
PT Bank and Hawesko Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Hawesko Holding
The main advantage of trading using opposite PT Bank and Hawesko Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Hawesko Holding 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 Hawesko Holding will offset losses from the drop in Hawesko Holding's long position.| PT Bank vs. China Merchants Bank | PT Bank vs. HDFC Bank Limited | PT Bank vs. ICICI Bank Limited | PT Bank vs. PT Bank Central |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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