Correlation Between Commonwealth Bank and PT Bank
Can any of the company-specific risk be diversified away by investing in both Commonwealth Bank 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 Commonwealth Bank and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commonwealth Bank of and PT Bank Rakyat, you can compare the effects of market volatilities on Commonwealth Bank 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 Commonwealth Bank with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commonwealth Bank and PT Bank.
Diversification Opportunities for Commonwealth Bank and PT Bank
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Commonwealth and BYRA is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Bank of 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 Commonwealth 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 Commonwealth Bank of 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 Commonwealth Bank i.e., Commonwealth Bank and PT Bank go up and down completely randomly.
Pair Corralation between Commonwealth Bank and PT Bank
Assuming the 90 days horizon Commonwealth Bank of is expected to generate 0.22 times more return on investment than PT Bank. However, Commonwealth Bank of is 4.59 times less risky than PT Bank. It trades about 0.05 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 9,587 in Commonwealth Bank of on September 20, 2024 and sell it today you would earn a total of 123.00 from holding Commonwealth Bank of or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commonwealth Bank of vs. PT Bank Rakyat
Performance |
| Timeline |
| Commonwealth Bank |
| PT Bank Rakyat |
Commonwealth Bank and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commonwealth Bank and PT Bank
The main advantage of trading using opposite Commonwealth Bank and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commonwealth Bank 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.| Commonwealth Bank vs. Superior Plus Corp | Commonwealth Bank vs. SIVERS SEMICONDUCTORS AB | Commonwealth Bank vs. CHINA HUARONG ENERHD 50 | Commonwealth Bank vs. NORDIC HALIBUT AS |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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