Correlation Between Pertamina Geothermal and PT Bank
Can any of the company-specific risk be diversified away by investing in both Pertamina Geothermal and PT Bank 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 Pertamina Geothermal and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pertamina Geothermal Energy and PT Bank Bisnis, you can compare the effects of market volatilities on Pertamina Geothermal and PT Bank 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 Pertamina Geothermal with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pertamina Geothermal and PT Bank.
Diversification Opportunities for Pertamina Geothermal and PT Bank
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pertamina and BBSI is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Pertamina Geothermal Energy and PT Bank Bisnis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Bisnis and Pertamina Geothermal 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 Pertamina Geothermal Energy are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Bisnis has no effect on the direction of Pertamina Geothermal i.e., Pertamina Geothermal and PT Bank go up and down completely randomly.
Pair Corralation between Pertamina Geothermal and PT Bank
Assuming the 90 days trading horizon Pertamina Geothermal is expected to generate 1.3 times less return on investment than PT Bank. In addition to that, Pertamina Geothermal is 1.02 times more volatile than PT Bank Bisnis. It trades about 0.02 of its total potential returns per unit of risk. PT Bank Bisnis is currently generating about 0.03 per unit of volatility. If you would invest 319,000 in PT Bank Bisnis on November 27, 2024 and sell it today you would earn a total of 91,000 from holding PT Bank Bisnis or generate 28.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pertamina Geothermal Energy vs. PT Bank Bisnis
Performance |
| Timeline |
| Pertamina Geothermal |
| PT Bank Bisnis |
Pertamina Geothermal and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pertamina Geothermal and PT Bank
The main advantage of trading using opposite Pertamina Geothermal and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pertamina Geothermal position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| Pertamina Geothermal vs. City Retail Developments | Pertamina Geothermal vs. Humpuss Intermoda Transportasi | Pertamina Geothermal vs. Protech Mitra Perkasa | Pertamina Geothermal vs. Global Mediacom Tbk |
| PT Bank vs. Bk Harda Internasional | PT Bank vs. Bank Yudha Bhakti | PT Bank vs. Bank Net Indonesia | PT Bank vs. Bank Amar Indonesia |
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 CEOs Directory module to screen CEOs from public companies around the world.
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