Correlation Between PT Bank and Acadia Realty
Can any of the company-specific risk be diversified away by investing in both PT Bank and Acadia Realty 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 Acadia Realty 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 Acadia Realty Trust, you can compare the effects of market volatilities on PT Bank and Acadia Realty 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 Acadia Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Acadia Realty.
Diversification Opportunities for PT Bank and Acadia Realty
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BYRA and Acadia is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Acadia Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Realty Trust 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 Acadia Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Realty Trust has no effect on the direction of PT Bank i.e., PT Bank and Acadia Realty go up and down completely randomly.
Pair Corralation between PT Bank and Acadia Realty
Assuming the 90 days trading horizon PT Bank Rakyat is expected to under-perform the Acadia Realty. In addition to that, PT Bank is 5.21 times more volatile than Acadia Realty Trust. It trades about -0.01 of its total potential returns per unit of risk. Acadia Realty Trust is currently generating about 0.35 per unit of volatility. If you would invest 2,220 in Acadia Realty Trust on August 29, 2024 and sell it today you would earn a total of 180.00 from holding Acadia Realty Trust or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Rakyat vs. Acadia Realty Trust
Performance |
| Timeline |
| PT Bank Rakyat |
| Acadia Realty Trust |
PT Bank and Acadia Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Acadia Realty
The main advantage of trading using opposite PT Bank and Acadia Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Acadia Realty 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 Acadia Realty will offset losses from the drop in Acadia Realty's long position.The idea behind PT Bank Rakyat and Acadia Realty Trust 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.| Acadia Realty vs. Elmos Semiconductor SE | Acadia Realty vs. TRAINLINE PLC LS | Acadia Realty vs. TEXAS ROADHOUSE | Acadia Realty vs. Nishi Nippon Railroad Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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