Correlation Between PT Bank and WOLFDEN RES
Can any of the company-specific risk be diversified away by investing in both PT Bank and WOLFDEN RES 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 WOLFDEN RES 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 WOLFDEN RES P, you can compare the effects of market volatilities on PT Bank and WOLFDEN RES 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 WOLFDEN RES. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and WOLFDEN RES.
Diversification Opportunities for PT Bank and WOLFDEN RES
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BYRA and WOLFDEN is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and WOLFDEN RES P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WOLFDEN RES P 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 WOLFDEN RES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WOLFDEN RES P has no effect on the direction of PT Bank i.e., PT Bank and WOLFDEN RES go up and down completely randomly.
Pair Corralation between PT Bank and WOLFDEN RES
Assuming the 90 days trading horizon PT Bank Rakyat is expected to under-perform the WOLFDEN RES. But the stock apears to be less risky and, when comparing its historical volatility, PT Bank Rakyat is 4.66 times less risky than WOLFDEN RES. The stock trades about -0.06 of its potential returns per unit of risk. The WOLFDEN RES P is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3.15 in WOLFDEN RES P on September 24, 2024 and sell it today you would lose (0.45) from holding WOLFDEN RES P or give up 14.29% 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. WOLFDEN RES P
Performance |
| Timeline |
| PT Bank Rakyat |
| WOLFDEN RES P |
PT Bank and WOLFDEN RES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and WOLFDEN RES
The main advantage of trading using opposite PT Bank and WOLFDEN RES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, WOLFDEN RES 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 WOLFDEN RES will offset losses from the drop in WOLFDEN RES's long position.The idea behind PT Bank Rakyat and WOLFDEN RES P 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.| WOLFDEN RES vs. Rio Tinto Group | WOLFDEN RES vs. Anglo American plc | WOLFDEN RES vs. Liontown Resources Limited | WOLFDEN RES vs. NEXA RESOURCES SA |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |