Correlation Between PT Bank and ASX
Can any of the company-specific risk be diversified away by investing in both PT Bank and ASX 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 ASX 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 ASX Limited, you can compare the effects of market volatilities on PT Bank and ASX 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 ASX. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and ASX.
Diversification Opportunities for PT Bank and ASX
Excellent diversification
The 3 months correlation between PQ9 and ASX is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and ASX Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASX Limited 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 ASX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASX Limited has no effect on the direction of PT Bank i.e., PT Bank and ASX go up and down completely randomly.
Pair Corralation between PT Bank and ASX
Assuming the 90 days horizon PT Bank Mandiri is expected to generate 3.79 times more return on investment than ASX. However, PT Bank is 3.79 times more volatile than ASX Limited. It trades about 0.04 of its potential returns per unit of risk. ASX Limited is currently generating about 0.05 per unit of risk. If you would invest 33.00 in PT Bank Mandiri on September 14, 2024 and sell it today you would earn a total of 5.00 from holding PT Bank Mandiri or generate 15.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
PT Bank Mandiri vs. ASX Limited
Performance |
| Timeline |
| PT Bank Mandiri |
| ASX Limited |
PT Bank and ASX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and ASX
The main advantage of trading using opposite PT Bank and ASX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, ASX 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 ASX will offset losses from the drop in ASX's long position.| PT Bank vs. China Merchants Bank | PT Bank vs. HDFC Bank Limited | PT Bank vs. ICICI Bank Limited | PT Bank vs. PT Bank Central |
| ASX vs. CME Group | ASX vs. Intercontinental Exchange | ASX vs. Hong Kong Exchanges | ASX vs. London Stock Exchange |
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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