Correlation Between PT Bank and Aurubis AG
Can any of the company-specific risk be diversified away by investing in both PT Bank and Aurubis AG 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 Aurubis AG 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 Aurubis AG, you can compare the effects of market volatilities on PT Bank and Aurubis AG 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 Aurubis AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Aurubis AG.
Diversification Opportunities for PT Bank and Aurubis AG
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BYRA and Aurubis is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Aurubis AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurubis 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 Aurubis AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurubis AG has no effect on the direction of PT Bank i.e., PT Bank and Aurubis AG go up and down completely randomly.
Pair Corralation between PT Bank and Aurubis AG
Assuming the 90 days trading horizon PT Bank Rakyat is expected to under-perform the Aurubis AG. In addition to that, PT Bank is 2.24 times more volatile than Aurubis AG. It trades about -0.04 of its total potential returns per unit of risk. Aurubis AG is currently generating about 0.22 per unit of volatility. If you would invest 7,590 in Aurubis AG on September 13, 2024 and sell it today you would earn a total of 860.00 from holding Aurubis AG or generate 11.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Aurubis AG
Performance |
| Timeline |
| PT Bank Rakyat |
| Aurubis AG |
PT Bank and Aurubis AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Aurubis AG
The main advantage of trading using opposite PT Bank and Aurubis AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Aurubis AG 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 Aurubis AG will offset losses from the drop in Aurubis AG'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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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