Correlation Between PT Bank and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both PT Bank and NTG Nordic 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 NTG Nordic 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 NTG Nordic Transport, you can compare the effects of market volatilities on PT Bank and NTG Nordic 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 NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and NTG Nordic.
Diversification Opportunities for PT Bank and NTG Nordic
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between BYRA and NTG is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport 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 NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of PT Bank i.e., PT Bank and NTG Nordic go up and down completely randomly.
Pair Corralation between PT Bank and NTG Nordic
Assuming the 90 days trading horizon PT Bank Rakyat is expected to under-perform the NTG Nordic. In addition to that, PT Bank is 1.84 times more volatile than NTG Nordic Transport. It trades about -0.12 of its total potential returns per unit of risk. NTG Nordic Transport is currently generating about 0.0 per unit of volatility. If you would invest 3,930 in NTG Nordic Transport on August 25, 2024 and sell it today you would lose (25.00) from holding NTG Nordic Transport or give up 0.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. NTG Nordic Transport
Performance |
| Timeline |
| PT Bank Rakyat |
| NTG Nordic Transport |
PT Bank and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and NTG Nordic
The main advantage of trading using opposite PT Bank and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, NTG Nordic 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 NTG Nordic will offset losses from the drop in NTG Nordic's long position.| PT Bank vs. NTG Nordic Transport | PT Bank vs. LION ONE METALS | PT Bank vs. Transport International Holdings | PT Bank vs. QUEEN S ROAD |
| NTG Nordic vs. SINGAPORE POST | NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings | NTG Nordic vs. Origin Agritech |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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