Correlation Between PT Bank and Halma Plc
Can any of the company-specific risk be diversified away by investing in both PT Bank and Halma Plc 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 Halma Plc 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 Halma plc, you can compare the effects of market volatilities on PT Bank and Halma Plc 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 Halma Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Halma Plc.
Diversification Opportunities for PT Bank and Halma Plc
Pay attention - limited upside
The 3 months correlation between PQ9 and Halma is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and Halma plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halma plc 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 Halma Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halma plc has no effect on the direction of PT Bank i.e., PT Bank and Halma Plc go up and down completely randomly.
Pair Corralation between PT Bank and Halma Plc
Assuming the 90 days horizon PT Bank Mandiri is expected to generate 2.62 times more return on investment than Halma Plc. However, PT Bank is 2.62 times more volatile than Halma plc. It trades about 0.03 of its potential returns per unit of risk. Halma plc is currently generating about 0.05 per unit of risk. If you would invest 33.00 in PT Bank Mandiri on October 16, 2024 and sell it today you would earn a total of 2.00 from holding PT Bank Mandiri or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
PT Bank Mandiri vs. Halma plc
Performance |
| Timeline |
| PT Bank Mandiri |
| Halma plc |
PT Bank and Halma Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Halma Plc
The main advantage of trading using opposite PT Bank and Halma Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Halma Plc 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 Halma Plc will offset losses from the drop in Halma Plc's long position.| PT Bank vs. Sun Life Financial | PT Bank vs. JSC Halyk bank | PT Bank vs. THRACE PLASTICS | PT Bank vs. VULCAN MATERIALS |
| Halma Plc vs. SIERRA METALS | Halma Plc vs. Unity Software | Halma Plc vs. Alfa Financial Software | Halma Plc vs. Yuexiu Transport Infrastructure |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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