Correlation Between DICKS Sporting and PT Bank
Can any of the company-specific risk be diversified away by investing in both DICKS Sporting 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 DICKS Sporting and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DICKS Sporting Goods and PT Bank Rakyat, you can compare the effects of market volatilities on DICKS Sporting 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 DICKS Sporting with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKS Sporting and PT Bank.
Diversification Opportunities for DICKS Sporting and PT Bank
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between DICKS and BYRA is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding DICKS Sporting Goods 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 DICKS Sporting 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 DICKS Sporting Goods 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 DICKS Sporting i.e., DICKS Sporting and PT Bank go up and down completely randomly.
Pair Corralation between DICKS Sporting and PT Bank
Assuming the 90 days horizon DICKS Sporting is expected to generate 1.82 times less return on investment than PT Bank. But when comparing it to its historical volatility, DICKS Sporting Goods is 2.3 times less risky than PT Bank. It trades about 0.14 of its potential returns per unit of risk. PT Bank Rakyat is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 24.00 in PT Bank Rakyat on September 12, 2024 and sell it today you would earn a total of 3.00 from holding PT Bank Rakyat or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DICKS Sporting Goods vs. PT Bank Rakyat
Performance |
| Timeline |
| DICKS Sporting Goods |
| PT Bank Rakyat |
DICKS Sporting and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DICKS Sporting and PT Bank
The main advantage of trading using opposite DICKS Sporting and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DICKS Sporting 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.| DICKS Sporting vs. Superior Plus Corp | DICKS Sporting vs. SIVERS SEMICONDUCTORS AB | DICKS Sporting vs. NorAm Drilling AS | DICKS Sporting vs. Norsk Hydro ASA |
| PT Bank vs. Constellation Software | PT Bank vs. AIR PRODCHEMICALS | PT Bank vs. Mitsui Chemicals | PT Bank vs. PSI Software AG |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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