Correlation Between Caseys General and PT Bank
Can any of the company-specific risk be diversified away by investing in both Caseys General 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 Caseys General and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caseys General Stores and PT Bank Rakyat, you can compare the effects of market volatilities on Caseys General 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 Caseys General with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and PT Bank.
Diversification Opportunities for Caseys General and PT Bank
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Caseys and BYRA is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores 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 Caseys General 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 Caseys General Stores 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 Caseys General i.e., Caseys General and PT Bank go up and down completely randomly.
Pair Corralation between Caseys General and PT Bank
Assuming the 90 days trading horizon Caseys General Stores is expected to under-perform the PT Bank. But the stock apears to be less risky and, when comparing its historical volatility, Caseys General Stores is 4.94 times less risky than PT Bank. The stock trades about -0.23 of its potential returns per unit of risk. The PT Bank Rakyat is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 24.00 in PT Bank Rakyat on October 11, 2024 and sell it today you would earn a total of 0.00 from holding PT Bank Rakyat or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. PT Bank Rakyat
Performance |
| Timeline |
| Caseys General Stores |
| PT Bank Rakyat |
Caseys General and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and PT Bank
The main advantage of trading using opposite Caseys General and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General 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.| Caseys General vs. BORR DRILLING NEW | Caseys General vs. NorAm Drilling AS | Caseys General vs. Ross Stores | Caseys General vs. Costco Wholesale Corp |
| PT Bank vs. Transport International Holdings | PT Bank vs. COSTCO WHOLESALE CDR | PT Bank vs. Caseys General Stores | PT Bank vs. VARIOUS EATERIES LS |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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