Correlation Between PT Bank and CIA ENGER
Can any of the company-specific risk be diversified away by investing in both PT Bank and CIA ENGER 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 CIA ENGER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Central and CIA ENGER ADR, you can compare the effects of market volatilities on PT Bank and CIA ENGER 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 CIA ENGER. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and CIA ENGER.
Diversification Opportunities for PT Bank and CIA ENGER
Very good diversification
The 3 months correlation between BZG2 and CIA is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and CIA ENGER ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIA ENGER ADR 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 Central are associated (or correlated) with CIA ENGER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIA ENGER ADR has no effect on the direction of PT Bank i.e., PT Bank and CIA ENGER go up and down completely randomly.
Pair Corralation between PT Bank and CIA ENGER
Assuming the 90 days trading horizon PT Bank is expected to generate 1.76 times less return on investment than CIA ENGER. But when comparing it to its historical volatility, PT Bank Central is 1.14 times less risky than CIA ENGER. It trades about 0.03 of its potential returns per unit of risk. CIA ENGER ADR is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 137.00 in CIA ENGER ADR on September 13, 2024 and sell it today you would earn a total of 77.00 from holding CIA ENGER ADR or generate 56.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Central vs. CIA ENGER ADR
Performance |
| Timeline |
| PT Bank Central |
| CIA ENGER ADR |
PT Bank and CIA ENGER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and CIA ENGER
The main advantage of trading using opposite PT Bank and CIA ENGER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, CIA ENGER 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 CIA ENGER will offset losses from the drop in CIA ENGER's long position.| PT Bank vs. Nucletron Electronic Aktiengesellschaft | PT Bank vs. Ribbon Communications | PT Bank vs. KIMBALL ELECTRONICS | PT Bank vs. Benchmark Electronics |
| CIA ENGER vs. Highlight Communications AG | CIA ENGER vs. Singapore Telecommunications Limited | CIA ENGER vs. Shenandoah Telecommunications | CIA ENGER vs. BORR DRILLING NEW |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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