Correlation Between Industrial and PT Bank
Can any of the company-specific risk be diversified away by investing in both Industrial 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 Industrial and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial and Commercial and PT Bank Maybank, you can compare the effects of market volatilities on Industrial 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 Industrial with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial and PT Bank.
Diversification Opportunities for Industrial and PT Bank
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Industrial and BOZA is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Industrial and Commercial 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 Industrial 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 Industrial and Commercial 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 Industrial i.e., Industrial and PT Bank go up and down completely randomly.
Pair Corralation between Industrial and PT Bank
Assuming the 90 days horizon Industrial and Commercial is expected to generate 0.58 times more return on investment than PT Bank. However, Industrial and Commercial is 1.71 times less risky than PT Bank. It trades about 0.13 of its potential returns per unit of risk. PT Bank Maybank is currently generating about -0.09 per unit of risk. If you would invest 56.00 in Industrial and Commercial on August 25, 2024 and sell it today you would earn a total of 3.00 from holding Industrial and Commercial or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial and Commercial vs. PT Bank Maybank
Performance |
| Timeline |
| Industrial and Commercial |
| PT Bank Maybank |
Industrial and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial and PT Bank
The main advantage of trading using opposite Industrial and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial 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.| Industrial vs. PT Bank Maybank | Industrial vs. North American Construction | Industrial vs. BANKINTER ADR 2007 | Industrial vs. AUST AGRICULTURAL |
| PT Bank vs. HDFC Bank Limited | PT Bank vs. PT Bank Central | PT Bank vs. DBS Group Holdings | PT Bank vs. State Bank of |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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