Correlation Between PT Bank and T.J. Maxx
Can any of the company-specific risk be diversified away by investing in both PT Bank and T.J. Maxx 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 T.J. Maxx 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 The TJX Companies, you can compare the effects of market volatilities on PT Bank and T.J. Maxx 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 T.J. Maxx. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and T.J. Maxx.
Diversification Opportunities for PT Bank and T.J. Maxx
Excellent diversification
The 3 months correlation between BYRA and T.J. is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and The TJX Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TJX Companies 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 T.J. Maxx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TJX Companies has no effect on the direction of PT Bank i.e., PT Bank and T.J. Maxx go up and down completely randomly.
Pair Corralation between PT Bank and T.J. Maxx
Assuming the 90 days trading horizon PT Bank Rakyat is expected to generate 4.69 times more return on investment than T.J. Maxx. However, PT Bank is 4.69 times more volatile than The TJX Companies. It trades about 0.03 of its potential returns per unit of risk. The TJX Companies is currently generating about 0.09 per unit of risk. If you would invest 27.00 in PT Bank Rakyat on August 30, 2024 and sell it today you would lose (2.00) from holding PT Bank Rakyat or give up 7.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. The TJX Companies
Performance |
| Timeline |
| PT Bank Rakyat |
| TJX Companies |
PT Bank and T.J. Maxx Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and T.J. Maxx
The main advantage of trading using opposite PT Bank and T.J. Maxx positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, T.J. Maxx 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 T.J. Maxx will offset losses from the drop in T.J. Maxx's long position.| PT Bank vs. UNIVMUSIC GRPADR050 | PT Bank vs. VIVA WINE GROUP | PT Bank vs. ITALIAN WINE BRANDS | PT Bank vs. UNIVERSAL MUSIC GROUP |
| T.J. Maxx vs. NEXT plc | T.J. Maxx vs. The Gap | T.J. Maxx vs. American Eagle Outfitters | T.J. Maxx vs. Superior Plus Corp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |