Correlation Between PT Bank and SHUAA Partners
Can any of the company-specific risk be diversified away by investing in both PT Bank and SHUAA Partners 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 SHUAA Partners 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 SHUAA Partners Acquisition, you can compare the effects of market volatilities on PT Bank and SHUAA Partners 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 SHUAA Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and SHUAA Partners.
Diversification Opportunities for PT Bank and SHUAA Partners
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PBCRF and SHUAA is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and SHUAA Partners Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHUAA Partners Acqui 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 SHUAA Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHUAA Partners Acqui has no effect on the direction of PT Bank i.e., PT Bank and SHUAA Partners go up and down completely randomly.
Pair Corralation between PT Bank and SHUAA Partners
Assuming the 90 days horizon PT Bank Central is expected to generate 20.21 times more return on investment than SHUAA Partners. However, PT Bank is 20.21 times more volatile than SHUAA Partners Acquisition. It trades about 0.03 of its potential returns per unit of risk. SHUAA Partners Acquisition is currently generating about 0.17 per unit of risk. If you would invest 52.00 in PT Bank Central on August 30, 2024 and sell it today you would earn a total of 8.00 from holding PT Bank Central or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.62% |
| Values | Daily Returns |
PT Bank Central vs. SHUAA Partners Acquisition
Performance |
| Timeline |
| PT Bank Central |
| SHUAA Partners Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PT Bank and SHUAA Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and SHUAA Partners
The main advantage of trading using opposite PT Bank and SHUAA Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, SHUAA Partners 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 SHUAA Partners will offset losses from the drop in SHUAA Partners' 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 |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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