Correlation Between PT Bank and Equifax
Can any of the company-specific risk be diversified away by investing in both PT Bank and Equifax 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 Equifax 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 Equifax, you can compare the effects of market volatilities on PT Bank and Equifax 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 Equifax. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Equifax.
Diversification Opportunities for PT Bank and Equifax
Poor diversification
The 3 months correlation between PQ9 and Equifax is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and Equifax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equifax 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 Equifax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equifax has no effect on the direction of PT Bank i.e., PT Bank and Equifax go up and down completely randomly.
Pair Corralation between PT Bank and Equifax
Assuming the 90 days horizon PT Bank Mandiri is expected to generate 2.5 times more return on investment than Equifax. However, PT Bank is 2.5 times more volatile than Equifax. It trades about 0.04 of its potential returns per unit of risk. Equifax is currently generating about 0.04 per unit of risk. If you would invest 29.00 in PT Bank Mandiri on August 31, 2024 and sell it today you would earn a total of 11.00 from holding PT Bank Mandiri or generate 37.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
PT Bank Mandiri vs. Equifax
Performance |
| Timeline |
| PT Bank Mandiri |
| Equifax |
PT Bank and Equifax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Equifax
The main advantage of trading using opposite PT Bank and Equifax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Equifax 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 Equifax will offset losses from the drop in Equifax's long position.| PT Bank vs. Citic Telecom International | PT Bank vs. CHINA EDUCATION GROUP | PT Bank vs. Strategic Education | PT Bank vs. Chunghwa Telecom Co |
| Equifax vs. Automatic Data Processing | Equifax vs. Superior Plus Corp | Equifax vs. NMI Holdings | Equifax vs. Origin Agritech |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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