Correlation Between PT Bank and State Bank
Can any of the company-specific risk be diversified away by investing in both PT Bank and State Bank 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 State Bank 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 State Bank of, you can compare the effects of market volatilities on PT Bank and State Bank 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 State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and State Bank.
Diversification Opportunities for PT Bank and State Bank
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BYRA and State is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank 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 State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of PT Bank i.e., PT Bank and State Bank go up and down completely randomly.
Pair Corralation between PT Bank and State Bank
Assuming the 90 days trading horizon PT Bank is expected to generate 1.66 times less return on investment than State Bank. In addition to that, PT Bank is 3.2 times more volatile than State Bank of. It trades about 0.02 of its total potential returns per unit of risk. State Bank of is currently generating about 0.09 per unit of volatility. If you would invest 5,988 in State Bank of on August 25, 2024 and sell it today you would earn a total of 2,912 from holding State Bank of or generate 48.63% 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. State Bank of
Performance |
| Timeline |
| PT Bank Rakyat |
| State Bank |
PT Bank and State Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and State Bank
The main advantage of trading using opposite PT Bank and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, State Bank 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 State Bank will offset losses from the drop in State Bank's long position.| PT Bank vs. HDFC Bank Limited | PT Bank vs. PT Bank Central | PT Bank vs. DBS Group Holdings | PT Bank vs. State Bank of |
| State Bank vs. HDFC Bank Limited | State Bank vs. PT Bank Central | State Bank vs. DBS Group Holdings | State Bank vs. PT Bank Rakyat |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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