Correlation Between PT Bank and TDK
Can any of the company-specific risk be diversified away by investing in both PT Bank and TDK 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 TDK 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 TDK Corporation, you can compare the effects of market volatilities on PT Bank and TDK 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 TDK. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and TDK.
Diversification Opportunities for PT Bank and TDK
Excellent diversification
The 3 months correlation between PQ9 and TDK is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and TDK Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TDK Corporation 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 TDK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TDK Corporation has no effect on the direction of PT Bank i.e., PT Bank and TDK go up and down completely randomly.
Pair Corralation between PT Bank and TDK
Assuming the 90 days horizon PT Bank is expected to generate 1.09 times less return on investment than TDK. In addition to that, PT Bank is 2.11 times more volatile than TDK Corporation. It trades about 0.03 of its total potential returns per unit of risk. TDK Corporation is currently generating about 0.07 per unit of volatility. If you would invest 630.00 in TDK Corporation on October 13, 2024 and sell it today you would earn a total of 558.00 from holding TDK Corporation or generate 88.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
PT Bank Mandiri vs. TDK Corp.
Performance |
| Timeline |
| PT Bank Mandiri |
| TDK Corporation |
PT Bank and TDK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and TDK
The main advantage of trading using opposite PT Bank and TDK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, TDK 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 TDK will offset losses from the drop in TDK's long position.| PT Bank vs. WisdomTree Investments | PT Bank vs. Tradegate AG Wertpapierhandelsbank | PT Bank vs. TRADEGATE | PT Bank vs. AUTO TRADER ADR |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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