Correlation Between PT Bank and Tokyo Electron
Can any of the company-specific risk be diversified away by investing in both PT Bank and Tokyo Electron 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 Tokyo Electron 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 Tokyo Electron Limited, you can compare the effects of market volatilities on PT Bank and Tokyo Electron 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 Tokyo Electron. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Tokyo Electron.
Diversification Opportunities for PT Bank and Tokyo Electron
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BYRA and Tokyo is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Tokyo Electron Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyo Electron 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 Tokyo Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyo Electron has no effect on the direction of PT Bank i.e., PT Bank and Tokyo Electron go up and down completely randomly.
Pair Corralation between PT Bank and Tokyo Electron
Assuming the 90 days trading horizon PT Bank Rakyat is expected to generate 1.85 times more return on investment than Tokyo Electron. However, PT Bank is 1.85 times more volatile than Tokyo Electron Limited. It trades about 0.2 of its potential returns per unit of risk. Tokyo Electron Limited is currently generating about 0.3 per unit of risk. If you would invest 23.00 in PT Bank Rakyat on October 25, 2024 and sell it today you would earn a total of 4.00 from holding PT Bank Rakyat or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Tokyo Electron Limited
Performance |
| Timeline |
| PT Bank Rakyat |
| Tokyo Electron |
PT Bank and Tokyo Electron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Tokyo Electron
The main advantage of trading using opposite PT Bank and Tokyo Electron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Tokyo Electron 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 Tokyo Electron will offset losses from the drop in Tokyo Electron's long position.| PT Bank vs. CHIBA BANK | PT Bank vs. Scottish Mortgage Investment | PT Bank vs. AOYAMA TRADING | PT Bank vs. VIRGIN WINES UK |
| Tokyo Electron vs. JAPAN AIRLINES | Tokyo Electron vs. Maple Leaf Foods | Tokyo Electron vs. United Natural Foods | Tokyo Electron vs. COFCO Joycome Foods |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |