Correlation Between PT Bank and NEO PERFORMMAT
Can any of the company-specific risk be diversified away by investing in both PT Bank and NEO PERFORMMAT 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 NEO PERFORMMAT 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 NEO PERFORMMAT, you can compare the effects of market volatilities on PT Bank and NEO PERFORMMAT 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 NEO PERFORMMAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and NEO PERFORMMAT.
Diversification Opportunities for PT Bank and NEO PERFORMMAT
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BYRA and NEO is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and NEO PERFORMMAT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEO PERFORMMAT 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 NEO PERFORMMAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEO PERFORMMAT has no effect on the direction of PT Bank i.e., PT Bank and NEO PERFORMMAT go up and down completely randomly.
Pair Corralation between PT Bank and NEO PERFORMMAT
Assuming the 90 days trading horizon PT Bank Rakyat is expected to generate 1.93 times more return on investment than NEO PERFORMMAT. However, PT Bank is 1.93 times more volatile than NEO PERFORMMAT. It trades about -0.1 of its potential returns per unit of risk. NEO PERFORMMAT is currently generating about -0.21 per unit of risk. If you would invest 25.00 in PT Bank Rakyat on December 8, 2024 and sell it today you would lose (4.00) from holding PT Bank Rakyat or give up 16.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
PT Bank Rakyat vs. NEO PERFORMMAT
Performance |
| Timeline |
| PT Bank Rakyat |
| NEO PERFORMMAT |
PT Bank and NEO PERFORMMAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and NEO PERFORMMAT
The main advantage of trading using opposite PT Bank and NEO PERFORMMAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, NEO PERFORMMAT 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 NEO PERFORMMAT will offset losses from the drop in NEO PERFORMMAT's long position.| PT Bank vs. CeoTronics AG | PT Bank vs. Ares Management Corp | PT Bank vs. ECHO INVESTMENT ZY | PT Bank vs. Coor Service Management |
| NEO PERFORMMAT vs. Schweizer Electronic AG | NEO PERFORMMAT vs. Hellenic Telecommunications Organization | NEO PERFORMMAT vs. KIMBALL ELECTRONICS | NEO PERFORMMAT vs. LPKF Laser Electronics |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |