Correlation Between Bank Central and Teb Bancorp
Can any of the company-specific risk be diversified away by investing in both Bank Central and Teb Bancorp 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 Bank Central and Teb Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and Teb Bancorp, you can compare the effects of market volatilities on Bank Central and Teb Bancorp 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 Bank Central with a short position of Teb Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Teb Bancorp.
Diversification Opportunities for Bank Central and Teb Bancorp
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Teb is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Teb Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teb Bancorp and Bank Central 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 Bank Central Asia are associated (or correlated) with Teb Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teb Bancorp has no effect on the direction of Bank Central i.e., Bank Central and Teb Bancorp go up and down completely randomly.
Pair Corralation between Bank Central and Teb Bancorp
Assuming the 90 days horizon Bank Central Asia is expected to under-perform the Teb Bancorp. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Central Asia is 3.05 times less risky than Teb Bancorp. The pink sheet trades about -0.26 of its potential returns per unit of risk. The Teb Bancorp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 800.00 in Teb Bancorp on October 12, 2024 and sell it today you would lose (5.00) from holding Teb Bancorp or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Central Asia vs. Teb Bancorp
Performance |
| Timeline |
| Bank Central Asia |
| Teb Bancorp |
Bank Central and Teb Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Teb Bancorp
The main advantage of trading using opposite Bank Central and Teb Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, Teb Bancorp 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 Teb Bancorp will offset losses from the drop in Teb Bancorp's long position.| Bank Central vs. Nedbank Group | Bank Central vs. Standard Bank Group | Bank Central vs. Kasikornbank Public Co | Bank Central vs. KBC Groep NV |
| Teb Bancorp vs. Eurobank Ergasias Services | Teb Bancorp vs. Standard Bank Group | Teb Bancorp vs. Bank Central Asia | Teb Bancorp vs. PSB Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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