Correlation Between PT Bank and Baker Hughes
Can any of the company-specific risk be diversified away by investing in both PT Bank and Baker Hughes 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 Baker Hughes 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 Baker Hughes Co, you can compare the effects of market volatilities on PT Bank and Baker Hughes 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 Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Baker Hughes.
Diversification Opportunities for PT Bank and Baker Hughes
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BYRA and Baker is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Baker Hughes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes 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 Baker Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Hughes has no effect on the direction of PT Bank i.e., PT Bank and Baker Hughes go up and down completely randomly.
Pair Corralation between PT Bank and Baker Hughes
Assuming the 90 days trading horizon PT Bank Rakyat is expected to under-perform the Baker Hughes. In addition to that, PT Bank is 2.0 times more volatile than Baker Hughes Co. It trades about -0.08 of its total potential returns per unit of risk. Baker Hughes Co is currently generating about 0.31 per unit of volatility. If you would invest 3,438 in Baker Hughes Co on September 1, 2024 and sell it today you would earn a total of 668.00 from holding Baker Hughes Co or generate 19.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Baker Hughes Co
Performance |
| Timeline |
| PT Bank Rakyat |
| Baker Hughes |
PT Bank and Baker Hughes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Baker Hughes
The main advantage of trading using opposite PT Bank and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Baker Hughes 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 Baker Hughes will offset losses from the drop in Baker Hughes' long position.| PT Bank vs. SCOTT TECHNOLOGY | PT Bank vs. GEAR4MUSIC LS 10 | PT Bank vs. DXC Technology Co | PT Bank vs. Warner Music Group |
| Baker Hughes vs. BOSTON BEER A | Baker Hughes vs. THAI BEVERAGE | Baker Hughes vs. Autohome ADR | Baker Hughes vs. MOLSON RS BEVERAGE |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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