Correlation Between PT Bank and Intercontinental
Can any of the company-specific risk be diversified away by investing in both PT Bank and Intercontinental 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 Intercontinental 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 Intercontinental Exchange, you can compare the effects of market volatilities on PT Bank and Intercontinental 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 Intercontinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Intercontinental.
Diversification Opportunities for PT Bank and Intercontinental
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BYRA and Intercontinental is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Intercontinental Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercontinental Exchange 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 Intercontinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intercontinental Exchange has no effect on the direction of PT Bank i.e., PT Bank and Intercontinental go up and down completely randomly.
Pair Corralation between PT Bank and Intercontinental
Assuming the 90 days trading horizon PT Bank Rakyat is expected to under-perform the Intercontinental. In addition to that, PT Bank is 5.51 times more volatile than Intercontinental Exchange. It trades about -0.07 of its total potential returns per unit of risk. Intercontinental Exchange is currently generating about 0.07 per unit of volatility. If you would invest 14,822 in Intercontinental Exchange on September 12, 2024 and sell it today you would earn a total of 214.00 from holding Intercontinental Exchange or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
PT Bank Rakyat vs. Intercontinental Exchange
Performance |
| Timeline |
| PT Bank Rakyat |
| Intercontinental Exchange |
PT Bank and Intercontinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Intercontinental
The main advantage of trading using opposite PT Bank and Intercontinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Intercontinental 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 Intercontinental will offset losses from the drop in Intercontinental'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 |
| Intercontinental vs. Bumrungrad Hospital Public | Intercontinental vs. Virtus Investment Partners | Intercontinental vs. DiamondRock Hospitality | Intercontinental vs. YOOMA WELLNESS INC |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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