Correlation Between PT Bank and ADHI KARYA
Can any of the company-specific risk be diversified away by investing in both PT Bank and ADHI KARYA 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 ADHI KARYA 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 ADHI KARYA, you can compare the effects of market volatilities on PT Bank and ADHI KARYA 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 ADHI KARYA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and ADHI KARYA.
Diversification Opportunities for PT Bank and ADHI KARYA
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between PQ9 and ADHI is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and ADHI KARYA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADHI KARYA 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 ADHI KARYA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADHI KARYA has no effect on the direction of PT Bank i.e., PT Bank and ADHI KARYA go up and down completely randomly.
Pair Corralation between PT Bank and ADHI KARYA
Assuming the 90 days horizon PT Bank is expected to generate 42.05 times less return on investment than ADHI KARYA. But when comparing it to its historical volatility, PT Bank Mandiri is 15.55 times less risky than ADHI KARYA. It trades about 0.03 of its potential returns per unit of risk. ADHI KARYA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2.55 in ADHI KARYA on November 2, 2024 and sell it today you would lose (1.25) from holding ADHI KARYA or give up 49.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
PT Bank Mandiri vs. ADHI KARYA
Performance |
| Timeline |
| PT Bank Mandiri |
| ADHI KARYA |
PT Bank and ADHI KARYA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and ADHI KARYA
The main advantage of trading using opposite PT Bank and ADHI KARYA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, ADHI KARYA 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 ADHI KARYA will offset losses from the drop in ADHI KARYA's long position.| PT Bank vs. National Health Investors | PT Bank vs. Cardinal Health | PT Bank vs. SPORTING | PT Bank vs. BII Railway Transportation |
| ADHI KARYA vs. ALERION CLEANPOWER | ADHI KARYA vs. Fukuyama Transporting Co | ADHI KARYA vs. Elmos Semiconductor SE | ADHI KARYA vs. DICKS Sporting Goods |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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