Correlation Between PT Bank and Ambac Financial
Can any of the company-specific risk be diversified away by investing in both PT Bank and Ambac Financial 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 Ambac Financial 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 Ambac Financial Group, you can compare the effects of market volatilities on PT Bank and Ambac Financial 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 Ambac Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Ambac Financial.
Diversification Opportunities for PT Bank and Ambac Financial
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PQ9 and Ambac is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and Ambac Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambac Financial Group 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 Ambac Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambac Financial Group has no effect on the direction of PT Bank i.e., PT Bank and Ambac Financial go up and down completely randomly.
Pair Corralation between PT Bank and Ambac Financial
Assuming the 90 days horizon PT Bank Mandiri is expected to generate 1.97 times more return on investment than Ambac Financial. However, PT Bank is 1.97 times more volatile than Ambac Financial Group. It trades about 0.03 of its potential returns per unit of risk. Ambac Financial Group is currently generating about -0.01 per unit of risk. If you would invest 27.00 in PT Bank Mandiri on October 1, 2024 and sell it today you would earn a total of 5.00 from holding PT Bank Mandiri or generate 18.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Mandiri vs. Ambac Financial Group
Performance |
| Timeline |
| PT Bank Mandiri |
| Ambac Financial Group |
PT Bank and Ambac Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Ambac Financial
The main advantage of trading using opposite PT Bank and Ambac Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Ambac Financial 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 Ambac Financial will offset losses from the drop in Ambac Financial's long position.| PT Bank vs. China Merchants Bank | PT Bank vs. ICICI Bank Limited | PT Bank vs. PT Bank Central | PT Bank vs. DBS Group Holdings |
| Ambac Financial vs. First American Financial | Ambac Financial vs. nib holdings limited | Ambac Financial vs. Lancashire Holdings Limited | Ambac Financial 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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