Correlation Between PT Bank and Vastned Retail
Can any of the company-specific risk be diversified away by investing in both PT Bank and Vastned Retail 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 Vastned Retail 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 Vastned Retail NV, you can compare the effects of market volatilities on PT Bank and Vastned Retail 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 Vastned Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Vastned Retail.
Diversification Opportunities for PT Bank and Vastned Retail
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BYRA and Vastned is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Vastned Retail NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastned Retail NV 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 Vastned Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastned Retail NV has no effect on the direction of PT Bank i.e., PT Bank and Vastned Retail go up and down completely randomly.
Pair Corralation between PT Bank and Vastned Retail
Assuming the 90 days trading horizon PT Bank Rakyat is expected to generate 2.97 times more return on investment than Vastned Retail. However, PT Bank is 2.97 times more volatile than Vastned Retail NV. It trades about 0.02 of its potential returns per unit of risk. Vastned Retail NV is currently generating about 0.05 per unit of risk. If you would invest 27.00 in PT Bank Rakyat on August 28, 2024 and sell it today you would lose (2.00) from holding PT Bank Rakyat or give up 7.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Vastned Retail NV
Performance |
| Timeline |
| PT Bank Rakyat |
| Vastned Retail NV |
PT Bank and Vastned Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Vastned Retail
The main advantage of trading using opposite PT Bank and Vastned Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Vastned Retail 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 Vastned Retail will offset losses from the drop in Vastned Retail's long position.The idea behind PT Bank Rakyat and Vastned Retail NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Vastned Retail vs. Simon Property Group | Vastned Retail vs. Vicinity Centres | Vastned Retail vs. Superior Plus Corp | Vastned Retail vs. NMI 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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