Correlation Between PT Bank and Tokyo Electron
Can any of the company-specific risk be diversified away by investing in both PT Bank and Tokyo Electron 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 Tokyo Electron 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 Tokyo Electron Limited, you can compare the effects of market volatilities on PT Bank and Tokyo Electron 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 Tokyo Electron. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Tokyo Electron.
Diversification Opportunities for PT Bank and Tokyo Electron
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BZG2 and Tokyo is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and Tokyo Electron Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyo Electron 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 Tokyo Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyo Electron has no effect on the direction of PT Bank i.e., PT Bank and Tokyo Electron go up and down completely randomly.
Pair Corralation between PT Bank and Tokyo Electron
Assuming the 90 days trading horizon PT Bank Central is expected to under-perform the Tokyo Electron. In addition to that, PT Bank is 1.46 times more volatile than Tokyo Electron Limited. It trades about -0.02 of its total potential returns per unit of risk. Tokyo Electron Limited is currently generating about 0.3 per unit of volatility. If you would invest 14,785 in Tokyo Electron Limited on October 25, 2024 and sell it today you would earn a total of 2,275 from holding Tokyo Electron Limited or generate 15.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Central vs. Tokyo Electron Limited
Performance |
| Timeline |
| PT Bank Central |
| Tokyo Electron |
PT Bank and Tokyo Electron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Tokyo Electron
The main advantage of trading using opposite PT Bank and Tokyo Electron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Tokyo Electron 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 Tokyo Electron will offset losses from the drop in Tokyo Electron's long position.| PT Bank vs. Tsingtao Brewery | PT Bank vs. The Boston Beer | PT Bank vs. MOLSON RS BEVERAGE | PT Bank vs. CARSALESCOM |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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