Correlation Between PT Bank and Euronext
Can any of the company-specific risk be diversified away by investing in both PT Bank and Euronext 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 Euronext 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 Euronext NV, you can compare the effects of market volatilities on PT Bank and Euronext 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 Euronext. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Euronext.
Diversification Opportunities for PT Bank and Euronext
Very good diversification
The 3 months correlation between BYRA and Euronext is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Euronext NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Euronext NV 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 Euronext. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Euronext NV has no effect on the direction of PT Bank i.e., PT Bank and Euronext go up and down completely randomly.
Pair Corralation between PT Bank and Euronext
Assuming the 90 days trading horizon PT Bank Rakyat is expected to generate 3.87 times more return on investment than Euronext. However, PT Bank is 3.87 times more volatile than Euronext NV. It trades about 0.11 of its potential returns per unit of risk. Euronext NV is currently generating about 0.16 per unit of risk. If you would invest 24.00 in PT Bank Rakyat on September 12, 2024 and sell it today you would earn a total of 3.00 from holding PT Bank Rakyat or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
PT Bank Rakyat vs. Euronext NV
Performance |
| Timeline |
| PT Bank Rakyat |
| Euronext NV |
PT Bank and Euronext Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Euronext
The main advantage of trading using opposite PT Bank and Euronext positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Euronext 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 Euronext will offset losses from the drop in Euronext's long position.| PT Bank vs. Constellation Software | PT Bank vs. AIR PRODCHEMICALS | PT Bank vs. Mitsui Chemicals | PT Bank vs. PSI Software AG |
| Euronext vs. CME Group | Euronext vs. Intercontinental Exchange | Euronext vs. Hong Kong Exchanges | Euronext vs. London Stock Exchange |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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