Correlation Between PacWest Bancorp and PT Bank
Can any of the company-specific risk be diversified away by investing in both PacWest Bancorp 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 PacWest Bancorp and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PacWest Bancorp and PT Bank Rakyat, you can compare the effects of market volatilities on PacWest Bancorp 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 PacWest Bancorp with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of PacWest Bancorp and PT Bank.
Diversification Opportunities for PacWest Bancorp and PT Bank
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between PacWest and BKRKF is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding PacWest Bancorp 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 PacWest Bancorp 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 PacWest Bancorp 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 PacWest Bancorp i.e., PacWest Bancorp and PT Bank go up and down completely randomly.
Pair Corralation between PacWest Bancorp and PT Bank
If you would invest 27.00 in PT Bank Rakyat on October 23, 2024 and sell it today you would lose (3.00) from holding PT Bank Rakyat or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 2.63% |
| Values | Daily Returns |
PacWest Bancorp vs. PT Bank Rakyat
Performance |
| Timeline |
| PacWest Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PT Bank Rakyat |
PacWest Bancorp and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PacWest Bancorp and PT Bank
The main advantage of trading using opposite PacWest Bancorp and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PacWest Bancorp 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.| PacWest Bancorp vs. Zions Bancorporation | PacWest Bancorp vs. KeyCorp | PacWest Bancorp vs. Comerica | PacWest Bancorp vs. First Horizon National |
| PT Bank vs. Bank Mandiri Persero | PT Bank vs. Piraeus Bank SA | PT Bank vs. Eurobank Ergasias Services | PT Bank vs. Kasikornbank Public Co |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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