Correlation Between PT Bank and GrafTech International
Can any of the company-specific risk be diversified away by investing in both PT Bank and GrafTech International 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 GrafTech International 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 GrafTech International, you can compare the effects of market volatilities on PT Bank and GrafTech International 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 GrafTech International. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and GrafTech International.
Diversification Opportunities for PT Bank and GrafTech International
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between BYRA and GrafTech is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and GrafTech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GrafTech International 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 GrafTech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GrafTech International has no effect on the direction of PT Bank i.e., PT Bank and GrafTech International go up and down completely randomly.
Pair Corralation between PT Bank and GrafTech International
Assuming the 90 days trading horizon PT Bank Rakyat is expected to generate 2.17 times more return on investment than GrafTech International. However, PT Bank is 2.17 times more volatile than GrafTech International. It trades about -0.03 of its potential returns per unit of risk. GrafTech International is currently generating about -0.23 per unit of risk. If you would invest 24.00 in PT Bank Rakyat on October 12, 2024 and sell it today you would lose (2.00) from holding PT Bank Rakyat or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
PT Bank Rakyat vs. GrafTech International
Performance |
| Timeline |
| PT Bank Rakyat |
| GrafTech International |
PT Bank and GrafTech International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and GrafTech International
The main advantage of trading using opposite PT Bank and GrafTech International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, GrafTech International 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 GrafTech International will offset losses from the drop in GrafTech International's long position.| PT Bank vs. DENTSPLY SIRONA | PT Bank vs. ANGANG STEEL H | PT Bank vs. Nippon Steel | PT Bank vs. Sch Environnement SA |
| GrafTech International vs. The Yokohama Rubber | GrafTech International vs. Materialise NV | GrafTech International vs. Martin Marietta Materials | GrafTech International vs. THRACE PLASTICS |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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