Correlation Between PT Bank and First Horizon
Can any of the company-specific risk be diversified away by investing in both PT Bank and First Horizon 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 First Horizon 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 First Horizon, you can compare the effects of market volatilities on PT Bank and First Horizon 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 First Horizon. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and First Horizon.
Diversification Opportunities for PT Bank and First Horizon
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PBCRF and First is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and First Horizon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Horizon 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 First Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Horizon has no effect on the direction of PT Bank i.e., PT Bank and First Horizon go up and down completely randomly.
Pair Corralation between PT Bank and First Horizon
Assuming the 90 days horizon PT Bank Central is expected to generate 14.49 times more return on investment than First Horizon. However, PT Bank is 14.49 times more volatile than First Horizon. It trades about 0.04 of its potential returns per unit of risk. First Horizon is currently generating about 0.23 per unit of risk. If you would invest 57.00 in PT Bank Central on November 3, 2024 and sell it today you would earn a total of 1.00 from holding PT Bank Central or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Central vs. First Horizon
Performance |
| Timeline |
| PT Bank Central |
| First Horizon |
PT Bank and First Horizon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and First Horizon
The main advantage of trading using opposite PT Bank and First Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, First Horizon 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 First Horizon will offset losses from the drop in First Horizon's long position.| PT Bank vs. Commercial International Bank | PT Bank vs. Caixabank SA ADR | PT Bank vs. Bank Rakyat | PT Bank vs. Lloyds Banking Group |
| First Horizon vs. Coda Octopus Group | First Horizon vs. Goosehead Insurance | First Horizon vs. Everspin Technologies | First Horizon vs. Guangdong Investment Limited |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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