Correlation Between PT Bank and DaVita
Can any of the company-specific risk be diversified away by investing in both PT Bank and DaVita 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 DaVita 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 DaVita Inc, you can compare the effects of market volatilities on PT Bank and DaVita 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 DaVita. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and DaVita.
Diversification Opportunities for PT Bank and DaVita
Very good diversification
The 3 months correlation between PQ9 and DaVita is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and DaVita Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DaVita Inc 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 DaVita. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DaVita Inc has no effect on the direction of PT Bank i.e., PT Bank and DaVita go up and down completely randomly.
Pair Corralation between PT Bank and DaVita
Assuming the 90 days horizon PT Bank is expected to generate 1.25 times less return on investment than DaVita. In addition to that, PT Bank is 2.18 times more volatile than DaVita Inc. It trades about 0.03 of its total potential returns per unit of risk. DaVita Inc is currently generating about 0.08 per unit of volatility. If you would invest 7,066 in DaVita Inc on September 3, 2024 and sell it today you would earn a total of 8,614 from holding DaVita Inc or generate 121.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Mandiri vs. DaVita Inc
Performance |
| Timeline |
| PT Bank Mandiri |
| DaVita Inc |
PT Bank and DaVita Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and DaVita
The main advantage of trading using opposite PT Bank and DaVita positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, DaVita 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 DaVita will offset losses from the drop in DaVita's long position.| PT Bank vs. Information Services International Dentsu | PT Bank vs. PennantPark Investment | PT Bank vs. New Residential Investment | PT Bank vs. Automatic Data Processing |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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