Correlation Between PT Bank and Southern Copper
Can any of the company-specific risk be diversified away by investing in both PT Bank and Southern Copper 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 Southern Copper 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 Southern Copper, you can compare the effects of market volatilities on PT Bank and Southern Copper 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 Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Southern Copper.
Diversification Opportunities for PT Bank and Southern Copper
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between BYRA and Southern is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Southern Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper 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 Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper has no effect on the direction of PT Bank i.e., PT Bank and Southern Copper go up and down completely randomly.
Pair Corralation between PT Bank and Southern Copper
Assuming the 90 days trading horizon PT Bank is expected to generate 2.72 times less return on investment than Southern Copper. In addition to that, PT Bank is 3.23 times more volatile than Southern Copper. It trades about 0.01 of its total potential returns per unit of risk. Southern Copper is currently generating about 0.08 per unit of volatility. If you would invest 9,492 in Southern Copper on September 13, 2024 and sell it today you would earn a total of 344.00 from holding Southern Copper or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Southern Copper
Performance |
| Timeline |
| PT Bank Rakyat |
| Southern Copper |
PT Bank and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Southern Copper
The main advantage of trading using opposite PT Bank and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| PT Bank vs. Consolidated Communications Holdings | PT Bank vs. Verizon Communications | PT Bank vs. GRIFFIN MINING LTD | PT Bank vs. Spirent Communications plc |
| Southern Copper vs. Sandfire Resources Limited | Southern Copper vs. Superior Plus Corp | Southern Copper vs. NMI Holdings | Southern Copper vs. SIVERS SEMICONDUCTORS AB |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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