Correlation Between PT Bank and Computershare
Can any of the company-specific risk be diversified away by investing in both PT Bank and Computershare 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 Computershare 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 Computershare Ltd ADR, you can compare the effects of market volatilities on PT Bank and Computershare 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 Computershare. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Computershare.
Diversification Opportunities for PT Bank and Computershare
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PBCRF and Computershare is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and Computershare Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computershare ADR 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 Computershare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computershare ADR has no effect on the direction of PT Bank i.e., PT Bank and Computershare go up and down completely randomly.
Pair Corralation between PT Bank and Computershare
Assuming the 90 days horizon PT Bank Central is expected to generate 2.69 times more return on investment than Computershare. However, PT Bank is 2.69 times more volatile than Computershare Ltd ADR. It trades about 0.03 of its potential returns per unit of risk. Computershare Ltd ADR is currently generating about 0.08 per unit of risk. If you would invest 57.00 in PT Bank Central on August 28, 2024 and sell it today you would earn a total of 11.00 from holding PT Bank Central or generate 19.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.74% |
| Values | Daily Returns |
PT Bank Central vs. Computershare Ltd ADR
Performance |
| Timeline |
| PT Bank Central |
| Computershare ADR |
PT Bank and Computershare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Computershare
The main advantage of trading using opposite PT Bank and Computershare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Computershare 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 Computershare will offset losses from the drop in Computershare's long position.The idea behind PT Bank Central and Computershare Ltd ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Computershare vs. GiveMePower Corp | Computershare vs. Axis Technologies Group | Computershare vs. Vortex Brands Co | Computershare vs. Sysorex |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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