Correlation Between PT Bank and MKS Instruments
Can any of the company-specific risk be diversified away by investing in both PT Bank and MKS Instruments 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 MKS Instruments 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 MKS Instruments, you can compare the effects of market volatilities on PT Bank and MKS Instruments 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 MKS Instruments. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and MKS Instruments.
Diversification Opportunities for PT Bank and MKS Instruments
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BYRA and MKS is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and MKS Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MKS Instruments 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 MKS Instruments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MKS Instruments has no effect on the direction of PT Bank i.e., PT Bank and MKS Instruments go up and down completely randomly.
Pair Corralation between PT Bank and MKS Instruments
Assuming the 90 days trading horizon PT Bank Rakyat is expected to under-perform the MKS Instruments. In addition to that, PT Bank is 2.33 times more volatile than MKS Instruments. It trades about -0.07 of its total potential returns per unit of risk. MKS Instruments is currently generating about -0.06 per unit of volatility. If you would invest 10,908 in MKS Instruments on September 12, 2024 and sell it today you would lose (383.00) from holding MKS Instruments or give up 3.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
PT Bank Rakyat vs. MKS Instruments
Performance |
| Timeline |
| PT Bank Rakyat |
| MKS Instruments |
PT Bank and MKS Instruments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and MKS Instruments
The main advantage of trading using opposite PT Bank and MKS Instruments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, MKS Instruments 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 MKS Instruments will offset losses from the drop in MKS Instruments' 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 |
| MKS Instruments vs. HEXAGON AB ADR1 | MKS Instruments vs. Superior Plus Corp | MKS Instruments vs. SIVERS SEMICONDUCTORS AB | MKS Instruments vs. NorAm Drilling AS |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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