Correlation Between JAPAN POST and PT Bank
Can any of the company-specific risk be diversified away by investing in both JAPAN POST 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 JAPAN POST and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JAPAN POST BANK and PT Bank Central, you can compare the effects of market volatilities on JAPAN POST 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 JAPAN POST with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of JAPAN POST and PT Bank.
Diversification Opportunities for JAPAN POST and PT Bank
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JAPAN and PBCRF is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN POST BANK and PT Bank Central in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Central and JAPAN POST 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 JAPAN POST BANK 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 Central has no effect on the direction of JAPAN POST i.e., JAPAN POST and PT Bank go up and down completely randomly.
Pair Corralation between JAPAN POST and PT Bank
Assuming the 90 days horizon JAPAN POST is expected to generate 1.48 times less return on investment than PT Bank. But when comparing it to its historical volatility, JAPAN POST BANK is 2.89 times less risky than PT Bank. It trades about 0.06 of its potential returns per unit of risk. PT Bank Central is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 50.00 in PT Bank Central on August 26, 2024 and sell it today you would earn a total of 13.00 from holding PT Bank Central or generate 26.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.32% |
| Values | Daily Returns |
JAPAN POST BANK vs. PT Bank Central
Performance |
| Timeline |
| JAPAN POST BANK |
| PT Bank Central |
JAPAN POST and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JAPAN POST and PT Bank
The main advantage of trading using opposite JAPAN POST and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN POST 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.| JAPAN POST vs. Bankinter SA ADR | JAPAN POST vs. First Horizon | JAPAN POST vs. JAPAN POST BANK | JAPAN POST vs. CaixaBank SA |
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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