Correlation Between PT Bank and PEH WERTPAPIER
Can any of the company-specific risk be diversified away by investing in both PT Bank and PEH WERTPAPIER 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 PEH WERTPAPIER 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 PEH WERTPAPIER, you can compare the effects of market volatilities on PT Bank and PEH WERTPAPIER 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 PEH WERTPAPIER. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and PEH WERTPAPIER.
Diversification Opportunities for PT Bank and PEH WERTPAPIER
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BYRA and PEH is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and PEH WERTPAPIER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEH WERTPAPIER 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 PEH WERTPAPIER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEH WERTPAPIER has no effect on the direction of PT Bank i.e., PT Bank and PEH WERTPAPIER go up and down completely randomly.
Pair Corralation between PT Bank and PEH WERTPAPIER
Assuming the 90 days trading horizon PT Bank Rakyat is expected to generate 5.21 times more return on investment than PEH WERTPAPIER. However, PT Bank is 5.21 times more volatile than PEH WERTPAPIER. It trades about 0.02 of its potential returns per unit of risk. PEH WERTPAPIER is currently generating about 0.06 per unit of risk. If you would invest 33.00 in PT Bank Rakyat on November 3, 2024 and sell it today you would lose (7.00) from holding PT Bank Rakyat or give up 21.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. PEH WERTPAPIER
Performance |
| Timeline |
| PT Bank Rakyat |
| PEH WERTPAPIER |
PT Bank and PEH WERTPAPIER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and PEH WERTPAPIER
The main advantage of trading using opposite PT Bank and PEH WERTPAPIER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, PEH WERTPAPIER 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 PEH WERTPAPIER will offset losses from the drop in PEH WERTPAPIER's long position.| PT Bank vs. GEELY AUTOMOBILE | PT Bank vs. 24SEVENOFFICE GROUP AB | PT Bank vs. Infrastrutture Wireless Italiane | PT Bank vs. Zijin Mining Group |
| PEH WERTPAPIER vs. Apple Inc | PEH WERTPAPIER vs. Apple Inc | PEH WERTPAPIER vs. Apple Inc | PEH WERTPAPIER vs. Apple 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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