Correlation Between Partners Bank and PSB Holdings
Can any of the company-specific risk be diversified away by investing in both Partners Bank and PSB Holdings 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 Partners Bank and PSB Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Partners Bank of and PSB Holdings, you can compare the effects of market volatilities on Partners Bank and PSB Holdings 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 Partners Bank with a short position of PSB Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Partners Bank and PSB Holdings.
Diversification Opportunities for Partners Bank and PSB Holdings
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Partners and PSB is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Partners Bank of and PSB Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PSB Holdings and Partners 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 Partners Bank of are associated (or correlated) with PSB Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PSB Holdings has no effect on the direction of Partners Bank i.e., Partners Bank and PSB Holdings go up and down completely randomly.
Pair Corralation between Partners Bank and PSB Holdings
Given the investment horizon of 90 days Partners Bank of is expected to under-perform the PSB Holdings. In addition to that, Partners Bank is 1.02 times more volatile than PSB Holdings. It trades about -0.02 of its total potential returns per unit of risk. PSB Holdings is currently generating about 0.1 per unit of volatility. If you would invest 1,923 in PSB Holdings on August 31, 2024 and sell it today you would earn a total of 867.00 from holding PSB Holdings or generate 45.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.94% |
| Values | Daily Returns |
Partners Bank of vs. PSB Holdings
Performance |
| Timeline |
| Partners Bank |
| PSB Holdings |
Partners Bank and PSB Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Partners Bank and PSB Holdings
The main advantage of trading using opposite Partners Bank and PSB Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Partners Bank position performs unexpectedly, PSB Holdings 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 PSB Holdings will offset losses from the drop in PSB Holdings' long position.| Partners Bank vs. Bank Mandiri Persero | Partners Bank vs. Piraeus Bank SA | Partners Bank vs. Eurobank Ergasias Services | Partners Bank vs. Kasikornbank Public Co |
| PSB Holdings vs. HUMANA INC | PSB Holdings vs. SCOR PK | PSB Holdings vs. Aquagold International | PSB Holdings vs. Thrivent High Yield |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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