Correlation Between Illumina and PT Bank
Can any of the company-specific risk be diversified away by investing in both Illumina 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 Illumina and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Illumina and PT Bank Maybank, you can compare the effects of market volatilities on Illumina 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 Illumina with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Illumina and PT Bank.
Diversification Opportunities for Illumina and PT Bank
Very good diversification
The 3 months correlation between Illumina and BOZA is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Illumina 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 Illumina 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 Illumina 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 Illumina i.e., Illumina and PT Bank go up and down completely randomly.
Pair Corralation between Illumina and PT Bank
Assuming the 90 days horizon Illumina is expected to generate 0.44 times more return on investment than PT Bank. However, Illumina is 2.29 times less risky than PT Bank. It trades about 0.11 of its potential returns per unit of risk. PT Bank Maybank is currently generating about 0.03 per unit of risk. If you would invest 9,756 in Illumina on September 3, 2024 and sell it today you would earn a total of 3,816 from holding Illumina or generate 39.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Illumina vs. PT Bank Maybank
Performance |
| Timeline |
| Illumina |
| PT Bank Maybank |
Illumina and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Illumina and PT Bank
The main advantage of trading using opposite Illumina and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Illumina 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.| Illumina vs. WT OFFSHORE | Illumina vs. PLAYTIKA HOLDING DL 01 | Illumina vs. JD SPORTS FASH | Illumina vs. EIDESVIK OFFSHORE NK |
| PT Bank vs. Iridium Communications | PT Bank vs. Gamma Communications plc | PT Bank vs. Ming Le Sports | PT Bank vs. Jacquet Metal Service |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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