Correlation Between PT Bank and Assured Guaranty
Can any of the company-specific risk be diversified away by investing in both PT Bank and Assured Guaranty 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 Assured Guaranty 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 Assured Guaranty, you can compare the effects of market volatilities on PT Bank and Assured Guaranty 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 Assured Guaranty. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Assured Guaranty.
Diversification Opportunities for PT Bank and Assured Guaranty
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PQ9 and Assured is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and Assured Guaranty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assured Guaranty 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 Assured Guaranty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assured Guaranty has no effect on the direction of PT Bank i.e., PT Bank and Assured Guaranty go up and down completely randomly.
Pair Corralation between PT Bank and Assured Guaranty
Assuming the 90 days horizon PT Bank Mandiri is expected to generate 1.65 times more return on investment than Assured Guaranty. However, PT Bank is 1.65 times more volatile than Assured Guaranty. It trades about 0.03 of its potential returns per unit of risk. Assured Guaranty is currently generating about 0.04 per unit of risk. If you would invest 29.00 in PT Bank Mandiri on September 14, 2024 and sell it today you would earn a total of 9.00 from holding PT Bank Mandiri or generate 31.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
PT Bank Mandiri vs. Assured Guaranty
Performance |
| Timeline |
| PT Bank Mandiri |
| Assured Guaranty |
PT Bank and Assured Guaranty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Assured Guaranty
The main advantage of trading using opposite PT Bank and Assured Guaranty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Assured Guaranty 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 Assured Guaranty will offset losses from the drop in Assured Guaranty'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 |
| Assured Guaranty vs. First American Financial | Assured Guaranty vs. MGIC Investment | Assured Guaranty vs. Lancashire Holdings Limited | Assured Guaranty vs. Trisura Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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