Correlation Between Strategic Investments and PT Bank
Can any of the company-specific risk be diversified away by investing in both Strategic Investments 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 Strategic Investments and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Investments AS and PT Bank Maybank, you can compare the effects of market volatilities on Strategic Investments 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 Strategic Investments with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Investments and PT Bank.
Diversification Opportunities for Strategic Investments and PT Bank
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Strategic and BOZA is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS 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 Strategic Investments 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 Strategic Investments AS 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 Strategic Investments i.e., Strategic Investments and PT Bank go up and down completely randomly.
Pair Corralation between Strategic Investments and PT Bank
Assuming the 90 days horizon Strategic Investments AS is expected to under-perform the PT Bank. But the stock apears to be less risky and, when comparing its historical volatility, Strategic Investments AS is 2.5 times less risky than PT Bank. The stock trades about -0.31 of its potential returns per unit of risk. The PT Bank Maybank is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1.25 in PT Bank Maybank on September 20, 2024 and sell it today you would earn a total of 0.20 from holding PT Bank Maybank or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Investments AS vs. PT Bank Maybank
Performance |
| Timeline |
| Strategic Investments |
| PT Bank Maybank |
Strategic Investments and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Investments and PT Bank
The main advantage of trading using opposite Strategic Investments and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Investments 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.| Strategic Investments vs. Ameriprise Financial | Strategic Investments vs. Ares Management Corp | Strategic Investments vs. Superior Plus Corp | Strategic Investments vs. SIVERS SEMICONDUCTORS AB |
| PT Bank vs. ARDAGH METAL PACDL 0001 | PT Bank vs. Alaska Air Group | PT Bank vs. Fair Isaac Corp | PT Bank vs. Westinghouse Air Brake |
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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