Correlation Between PT Bank and Pentair Plc
Can any of the company-specific risk be diversified away by investing in both PT Bank and Pentair 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 Pentair 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 Pentair plc, you can compare the effects of market volatilities on PT Bank and Pentair 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 Pentair Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Pentair Plc.
Diversification Opportunities for PT Bank and Pentair Plc
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PQ9 and Pentair is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and Pentair plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pentair 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 Pentair Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pentair plc has no effect on the direction of PT Bank i.e., PT Bank and Pentair Plc go up and down completely randomly.
Pair Corralation between PT Bank and Pentair Plc
Assuming the 90 days horizon PT Bank is expected to generate 3.25 times less return on investment than Pentair Plc. In addition to that, PT Bank is 2.69 times more volatile than Pentair plc. It trades about 0.05 of its total potential returns per unit of risk. Pentair plc is currently generating about 0.42 per unit of volatility. If you would invest 9,146 in Pentair plc on August 31, 2024 and sell it today you would earn a total of 1,259 from holding Pentair plc or generate 13.77% 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. Pentair plc
Performance |
| Timeline |
| PT Bank Mandiri |
| Pentair plc |
PT Bank and Pentair Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Pentair Plc
The main advantage of trading using opposite PT Bank and Pentair Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Pentair 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 Pentair Plc will offset losses from the drop in Pentair Plc'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 |
| Pentair Plc vs. COMMERCIAL VEHICLE | Pentair Plc vs. SEKISUI CHEMICAL | Pentair Plc vs. KINGBOARD CHEMICAL | Pentair Plc vs. Mitsubishi Gas Chemical |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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