Correlation Between PT Bank and Zhejiang Expressway

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Can any of the company-specific risk be diversified away by investing in both PT Bank and Zhejiang Expressway 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 Zhejiang Expressway 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 Zhejiang Expressway Co, you can compare the effects of market volatilities on PT Bank and Zhejiang Expressway 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 Zhejiang Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Zhejiang Expressway.

Diversification Opportunities for PT Bank and Zhejiang Expressway

PBCRFZhejiangDiversified AwayPBCRFZhejiangDiversified Away100%
0.14
  Correlation Coefficient

Average diversification

The 3 months correlation between PBCRF and Zhejiang is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and Zhejiang Expressway Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Expressway 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 Zhejiang Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Expressway has no effect on the direction of PT Bank i.e., PT Bank and Zhejiang Expressway go up and down completely randomly.

Pair Corralation between PT Bank and Zhejiang Expressway

If you would invest  65.00  in Zhejiang Expressway Co on December 4, 2024 and sell it today you would earn a total of  0.00  from holding Zhejiang Expressway Co or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

PT Bank Central  vs.  Zhejiang Expressway Co

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-15-10-505
JavaScript chart by amCharts 3.21.15PBCRF ZHEXF
       Timeline  
PT Bank Central 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days PT Bank Central has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15JanFebFebMar0.50.550.60.65
Zhejiang Expressway 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Zhejiang Expressway Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Zhejiang Expressway is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15JanFebFebMar0.650.655

PT Bank and Zhejiang Expressway Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.0-5.99-3.98-1.98-0.03211.93.835.757.68 0.20.40.60.81.01.21.4
JavaScript chart by amCharts 3.21.15PBCRF ZHEXF
       Returns  

Pair Trading with PT Bank and Zhejiang Expressway

The main advantage of trading using opposite PT Bank and Zhejiang Expressway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Zhejiang Expressway 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 Zhejiang Expressway will offset losses from the drop in Zhejiang Expressway's long position.
The idea behind PT Bank Central and Zhejiang Expressway Co 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.
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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