Correlation Between CPU SOFTWAREHOUSE and PT Bank
Can any of the company-specific risk be diversified away by investing in both CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CPU SOFTWAREHOUSE and PT Bank Rakyat, you can compare the effects of market volatilities on CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CPU SOFTWAREHOUSE and PT Bank.
Diversification Opportunities for CPU SOFTWAREHOUSE and PT Bank
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CPU and BYRA is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding CPU SOFTWAREHOUSE and PT Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Rakyat and CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE 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 Rakyat has no effect on the direction of CPU SOFTWAREHOUSE i.e., CPU SOFTWAREHOUSE and PT Bank go up and down completely randomly.
Pair Corralation between CPU SOFTWAREHOUSE and PT Bank
Assuming the 90 days trading horizon CPU SOFTWAREHOUSE is expected to generate 1.19 times more return on investment than PT Bank. However, CPU SOFTWAREHOUSE is 1.19 times more volatile than PT Bank Rakyat. It trades about 0.02 of its potential returns per unit of risk. PT Bank Rakyat is currently generating about -0.04 per unit of risk. If you would invest 91.00 in CPU SOFTWAREHOUSE on September 20, 2024 and sell it today you would lose (2.00) from holding CPU SOFTWAREHOUSE or give up 2.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CPU SOFTWAREHOUSE vs. PT Bank Rakyat
Performance |
| Timeline |
| CPU SOFTWAREHOUSE |
| PT Bank Rakyat |
CPU SOFTWAREHOUSE and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CPU SOFTWAREHOUSE and PT Bank
The main advantage of trading using opposite CPU SOFTWAREHOUSE and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CPU SOFTWAREHOUSE 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.| CPU SOFTWAREHOUSE vs. Lion One Metals | CPU SOFTWAREHOUSE vs. GALENA MINING LTD | CPU SOFTWAREHOUSE vs. Seven West Media | CPU SOFTWAREHOUSE vs. CeoTronics AG |
| PT Bank vs. PT Bank Maybank | PT Bank vs. Commonwealth Bank of | PT Bank vs. Western Copper and | PT Bank vs. REVO INSURANCE SPA |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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