Correlation Between PT Bank and Model N
Can any of the company-specific risk be diversified away by investing in both PT Bank and Model N 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 Model N 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 Model N, you can compare the effects of market volatilities on PT Bank and Model N 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 Model N. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Model N.
Diversification Opportunities for PT Bank and Model N
Excellent diversification
The 3 months correlation between PBCRF and Model is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and Model N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Model N 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 Model N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Model N has no effect on the direction of PT Bank i.e., PT Bank and Model N go up and down completely randomly.
Pair Corralation between PT Bank and Model N
Assuming the 90 days horizon PT Bank Central is expected to generate 1.67 times more return on investment than Model N. However, PT Bank is 1.67 times more volatile than Model N. It trades about 0.02 of its potential returns per unit of risk. Model N is currently generating about -0.03 per unit of risk. If you would invest 55.00 in PT Bank Central on October 20, 2024 and sell it today you would earn a total of 1.00 from holding PT Bank Central or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 72.9% |
| Values | Daily Returns |
PT Bank Central vs. Model N
Performance |
| Timeline |
| PT Bank Central |
| Model N |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PT Bank and Model N Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Model N
The main advantage of trading using opposite PT Bank and Model N positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Model N 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 Model N will offset losses from the drop in Model N's long position.| PT Bank vs. The Farmers Bank | PT Bank vs. CCSB Financial Corp | PT Bank vs. Bank of Utica | PT Bank vs. Delhi Bank Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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