Correlation Between DBS Group and PT Bank
Can any of the company-specific risk be diversified away by investing in both DBS Group 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 DBS Group and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DBS Group Holdings and PT Bank Maybank, you can compare the effects of market volatilities on DBS Group 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 DBS Group with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of DBS Group and PT Bank.
Diversification Opportunities for DBS Group and PT Bank
Excellent diversification
The 3 months correlation between DBS and BOZA is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding DBS Group Holdings and PT Bank Maybank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Maybank and DBS Group 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 DBS Group Holdings 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 Maybank has no effect on the direction of DBS Group i.e., DBS Group and PT Bank go up and down completely randomly.
Pair Corralation between DBS Group and PT Bank
Assuming the 90 days trading horizon DBS Group Holdings is expected to generate 0.28 times more return on investment than PT Bank. However, DBS Group Holdings is 3.58 times less risky than PT Bank. It trades about 0.09 of its potential returns per unit of risk. PT Bank Maybank is currently generating about 0.02 per unit of risk. If you would invest 1,765 in DBS Group Holdings on August 29, 2024 and sell it today you would earn a total of 1,180 from holding DBS Group Holdings or generate 66.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DBS Group Holdings vs. PT Bank Maybank
Performance |
| Timeline |
| DBS Group Holdings |
| PT Bank Maybank |
DBS Group and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DBS Group and PT Bank
The main advantage of trading using opposite DBS Group and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBS Group 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.| DBS Group vs. Arrow Electronics | DBS Group vs. Benchmark Electronics | DBS Group vs. EAT WELL INVESTMENT | DBS Group vs. Strategic Investments AS |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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