Correlation Between PT Bank and Sitime
Can any of the company-specific risk be diversified away by investing in both PT Bank and Sitime 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 Sitime 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 Sitime, you can compare the effects of market volatilities on PT Bank and Sitime 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 Sitime. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Sitime.
Diversification Opportunities for PT Bank and Sitime
Very good diversification
The 3 months correlation between PBCRF and Sitime is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and Sitime in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitime 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 Sitime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitime has no effect on the direction of PT Bank i.e., PT Bank and Sitime go up and down completely randomly.
Pair Corralation between PT Bank and Sitime
Assuming the 90 days horizon PT Bank Central is expected to under-perform the Sitime. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Bank Central is 1.42 times less risky than Sitime. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Sitime is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 18,186 in Sitime on August 27, 2024 and sell it today you would earn a total of 2,922 from holding Sitime or generate 16.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Central vs. Sitime
Performance |
| Timeline |
| PT Bank Central |
| Sitime |
PT Bank and Sitime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Sitime
The main advantage of trading using opposite PT Bank and Sitime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Sitime 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 Sitime will offset losses from the drop in Sitime's long position.The idea behind PT Bank Central and Sitime 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.| Sitime vs. Lattice Semiconductor | Sitime vs. Qorvo Inc | Sitime vs. Microchip Technology | Sitime vs. Silicon Laboratories |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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