Correlation Between Commercial International and PT Bank
Can any of the company-specific risk be diversified away by investing in both Commercial International and PT Bank 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 Commercial International and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial International Bank and PT Bank Central, you can compare the effects of market volatilities on Commercial International and PT Bank 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 Commercial International with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial International and PT Bank.
Diversification Opportunities for Commercial International and PT Bank
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Commercial and PBCRF is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Commercial International Bank and PT Bank Central in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Central and Commercial International 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 Commercial International Bank are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Central has no effect on the direction of Commercial International i.e., Commercial International and PT Bank go up and down completely randomly.
Pair Corralation between Commercial International and PT Bank
Assuming the 90 days horizon Commercial International Bank is expected to under-perform the PT Bank. But the otc stock apears to be less risky and, when comparing its historical volatility, Commercial International Bank is 3.57 times less risky than PT Bank. The otc stock trades about -0.31 of its potential returns per unit of risk. The PT Bank Central is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 59.00 in PT Bank Central on October 20, 2024 and sell it today you would lose (3.00) from holding PT Bank Central or give up 5.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commercial International Bank vs. PT Bank Central
Performance |
| Timeline |
| Commercial International |
| PT Bank Central |
Commercial International and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial International and PT Bank
The main advantage of trading using opposite Commercial International and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial International position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| Commercial International vs. Bank Mandiri Persero | Commercial International vs. Turkiye Garanti Bankasi | Commercial International vs. BOC Hong Kong | Commercial International vs. Hang Seng Bank |
| PT Bank vs. Commercial International Bank | PT Bank vs. Caixabank SA ADR | PT Bank vs. Bank Rakyat | PT Bank vs. Lloyds Banking Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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