Correlation Between PT Bank and Welltower
Can any of the company-specific risk be diversified away by investing in both PT Bank and Welltower 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 Welltower 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 Welltower, you can compare the effects of market volatilities on PT Bank and Welltower 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 Welltower. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Welltower.
Diversification Opportunities for PT Bank and Welltower
Pay attention - limited upside
The 3 months correlation between BYRA and Welltower is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Welltower in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Welltower 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 Welltower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Welltower has no effect on the direction of PT Bank i.e., PT Bank and Welltower go up and down completely randomly.
Pair Corralation between PT Bank and Welltower
Assuming the 90 days trading horizon PT Bank Rakyat is expected to under-perform the Welltower. In addition to that, PT Bank is 3.43 times more volatile than Welltower. It trades about -0.01 of its total potential returns per unit of risk. Welltower is currently generating about 0.29 per unit of volatility. If you would invest 11,992 in Welltower on August 29, 2024 and sell it today you would earn a total of 1,223 from holding Welltower or generate 10.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Welltower
Performance |
| Timeline |
| PT Bank Rakyat |
| Welltower |
PT Bank and Welltower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Welltower
The main advantage of trading using opposite PT Bank and Welltower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Welltower 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 Welltower will offset losses from the drop in Welltower's long position.| PT Bank vs. METHODE ELECTRONICS | PT Bank vs. STMICROELECTRONICS | PT Bank vs. AGF Management Limited | PT Bank vs. Nucletron Electronic Aktiengesellschaft |
| Welltower vs. Retail Estates NV | Welltower vs. COSTCO WHOLESALE CDR | Welltower vs. Ross Stores | Welltower vs. SALESFORCE INC CDR |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Stocks Directory Find actively traded stocks across global markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |