Correlation Between PT Bank and Sibanye Stillwater
Can any of the company-specific risk be diversified away by investing in both PT Bank and Sibanye Stillwater 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 Sibanye Stillwater into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Mandiri and Sibanye Stillwater Limited, you can compare the effects of market volatilities on PT Bank and Sibanye Stillwater 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 Sibanye Stillwater. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Sibanye Stillwater.
Diversification Opportunities for PT Bank and Sibanye Stillwater
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PQ9 and Sibanye is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and Sibanye Stillwater Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sibanye Stillwater 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 Mandiri are associated (or correlated) with Sibanye Stillwater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sibanye Stillwater has no effect on the direction of PT Bank i.e., PT Bank and Sibanye Stillwater go up and down completely randomly.
Pair Corralation between PT Bank and Sibanye Stillwater
Assuming the 90 days horizon PT Bank Mandiri is expected to generate 1.2 times more return on investment than Sibanye Stillwater. However, PT Bank is 1.2 times more volatile than Sibanye Stillwater Limited. It trades about -0.08 of its potential returns per unit of risk. Sibanye Stillwater Limited is currently generating about -0.13 per unit of risk. If you would invest 39.00 in PT Bank Mandiri on September 1, 2024 and sell it today you would lose (4.00) from holding PT Bank Mandiri or give up 10.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
PT Bank Mandiri vs. Sibanye Stillwater Limited
Performance |
| Timeline |
| PT Bank Mandiri |
| Sibanye Stillwater |
PT Bank and Sibanye Stillwater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Sibanye Stillwater
The main advantage of trading using opposite PT Bank and Sibanye Stillwater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Sibanye Stillwater 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 Sibanye Stillwater will offset losses from the drop in Sibanye Stillwater's long position.| PT Bank vs. CODERE ONLINE LUX | PT Bank vs. Sumitomo Chemical | PT Bank vs. British American Tobacco | PT Bank vs. TIANDE CHEMICAL |
| Sibanye Stillwater vs. Playtech plc | Sibanye Stillwater vs. UNITED UTILITIES GR | Sibanye Stillwater vs. Major Drilling Group | Sibanye Stillwater vs. Algonquin Power Utilities |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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