Correlation Between PT Bank and Wayside Technology
Can any of the company-specific risk be diversified away by investing in both PT Bank and Wayside Technology 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 Wayside Technology 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 Wayside Technology Group, you can compare the effects of market volatilities on PT Bank and Wayside Technology 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 Wayside Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Wayside Technology.
Diversification Opportunities for PT Bank and Wayside Technology
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BYRA and Wayside is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Wayside Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wayside Technology 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 Wayside Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wayside Technology has no effect on the direction of PT Bank i.e., PT Bank and Wayside Technology go up and down completely randomly.
Pair Corralation between PT Bank and Wayside Technology
Assuming the 90 days trading horizon PT Bank is expected to generate 2.86 times less return on investment than Wayside Technology. In addition to that, PT Bank is 1.9 times more volatile than Wayside Technology Group. It trades about 0.02 of its total potential returns per unit of risk. Wayside Technology Group is currently generating about 0.1 per unit of volatility. If you would invest 3,219 in Wayside Technology Group on October 19, 2024 and sell it today you would earn a total of 9,081 from holding Wayside Technology Group or generate 282.11% 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. Wayside Technology Group
Performance |
| Timeline |
| PT Bank Rakyat |
| Wayside Technology |
PT Bank and Wayside Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Wayside Technology
The main advantage of trading using opposite PT Bank and Wayside Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Wayside Technology 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 Wayside Technology will offset losses from the drop in Wayside Technology's long position.| PT Bank vs. Charter Communications | PT Bank vs. GLG LIFE TECH | PT Bank vs. BioNTech SE | PT Bank vs. Telecom Argentina SA |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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