Correlation Between PT Bank and Viaderma
Can any of the company-specific risk be diversified away by investing in both PT Bank and Viaderma 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 Viaderma 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 Viaderma, you can compare the effects of market volatilities on PT Bank and Viaderma 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 Viaderma. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Viaderma.
Diversification Opportunities for PT Bank and Viaderma
Excellent diversification
The 3 months correlation between PBCRF and Viaderma is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and Viaderma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viaderma 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 Viaderma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viaderma has no effect on the direction of PT Bank i.e., PT Bank and Viaderma go up and down completely randomly.
Pair Corralation between PT Bank and Viaderma
Assuming the 90 days horizon PT Bank is expected to generate 12.82 times less return on investment than Viaderma. But when comparing it to its historical volatility, PT Bank Central is 2.68 times less risky than Viaderma. It trades about 0.01 of its potential returns per unit of risk. Viaderma is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.90 in Viaderma on October 22, 2024 and sell it today you would earn a total of 0.10 from holding Viaderma or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.24% |
| Values | Daily Returns |
PT Bank Central vs. Viaderma
Performance |
| Timeline |
| PT Bank Central |
| Viaderma |
PT Bank and Viaderma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Viaderma
The main advantage of trading using opposite PT Bank and Viaderma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Viaderma 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 Viaderma will offset losses from the drop in Viaderma'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 |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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