Correlation Between PT Bank and AB International
Can any of the company-specific risk be diversified away by investing in both PT Bank and AB International 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 PT Bank and AB International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Central and AB International Group, you can compare the effects of market volatilities on PT Bank and AB International 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 PT Bank with a short position of AB International. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and AB International.
Diversification Opportunities for PT Bank and AB International
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PBCRF and ABQQ is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and AB International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB International and PT Bank 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 PT Bank Central are associated (or correlated) with AB International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB International has no effect on the direction of PT Bank i.e., PT Bank and AB International go up and down completely randomly.
Pair Corralation between PT Bank and AB International
Assuming the 90 days horizon PT Bank is expected to generate 34.76 times less return on investment than AB International. But when comparing it to its historical volatility, PT Bank Central is 7.03 times less risky than AB International. It trades about 0.03 of its potential returns per unit of risk. AB International Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.03 in AB International Group on August 31, 2024 and sell it today you would earn a total of 0.08 from holding AB International Group or generate 266.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.97% |
| Values | Daily Returns |
PT Bank Central vs. AB International Group
Performance |
| Timeline |
| PT Bank Central |
| AB International |
PT Bank and AB International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and AB International
The main advantage of trading using opposite PT Bank and AB International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, AB International 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 AB International will offset losses from the drop in AB International's long position.| PT Bank vs. Bank Mandiri Persero | PT Bank vs. Piraeus Bank SA | PT Bank vs. Eurobank Ergasias Services | PT Bank vs. Kasikornbank Public Co |
| AB International vs. Peer To Peer | AB International vs. AppYea Inc | AB International vs. Image Protect | AB International vs. Bowmo Inc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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