Correlation Between PT Bank and Safran SA
Can any of the company-specific risk be diversified away by investing in both PT Bank and Safran SA 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 Safran SA 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 Safran SA, you can compare the effects of market volatilities on PT Bank and Safran SA 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 Safran SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Safran SA.
Diversification Opportunities for PT Bank and Safran SA
Excellent diversification
The 3 months correlation between BYRA and Safran is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Safran SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safran SA 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 Safran SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safran SA has no effect on the direction of PT Bank i.e., PT Bank and Safran SA go up and down completely randomly.
Pair Corralation between PT Bank and Safran SA
Assuming the 90 days trading horizon PT Bank is expected to generate 2.52 times less return on investment than Safran SA. In addition to that, PT Bank is 3.13 times more volatile than Safran SA. It trades about 0.01 of its total potential returns per unit of risk. Safran SA is currently generating about 0.1 per unit of volatility. If you would invest 11,444 in Safran SA on August 25, 2024 and sell it today you would earn a total of 10,466 from holding Safran SA or generate 91.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
PT Bank Rakyat vs. Safran SA
Performance |
| Timeline |
| PT Bank Rakyat |
| Safran SA |
PT Bank and Safran SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Safran SA
The main advantage of trading using opposite PT Bank and Safran SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Safran SA 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 Safran SA will offset losses from the drop in Safran SA'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 |
| Safran SA vs. GRIFFIN MINING LTD | Safran SA vs. Coeur Mining | Safran SA vs. ECHO INVESTMENT ZY | Safran SA vs. Geely Automobile Holdings |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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