Correlation Between PT Bank and TERUMO CORP
Can any of the company-specific risk be diversified away by investing in both PT Bank and TERUMO CORP 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 TERUMO CORP 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 TERUMO P, you can compare the effects of market volatilities on PT Bank and TERUMO CORP 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 TERUMO CORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and TERUMO CORP.
Diversification Opportunities for PT Bank and TERUMO CORP
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PQ9 and TERUMO is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and TERUMO P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TERUMO CORP 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 TERUMO CORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TERUMO CORP has no effect on the direction of PT Bank i.e., PT Bank and TERUMO CORP go up and down completely randomly.
Pair Corralation between PT Bank and TERUMO CORP
Assuming the 90 days horizon PT Bank is expected to generate 12.42 times less return on investment than TERUMO CORP. In addition to that, PT Bank is 1.48 times more volatile than TERUMO P. It trades about 0.01 of its total potential returns per unit of risk. TERUMO P is currently generating about 0.25 per unit of volatility. If you would invest 1,730 in TERUMO P on August 28, 2024 and sell it today you would earn a total of 180.00 from holding TERUMO P or generate 10.4% 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. TERUMO P
Performance |
| Timeline |
| PT Bank Mandiri |
| TERUMO CORP |
PT Bank and TERUMO CORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and TERUMO CORP
The main advantage of trading using opposite PT Bank and TERUMO CORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, TERUMO CORP 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 TERUMO CORP will offset losses from the drop in TERUMO CORP's long position.| PT Bank vs. Lamar Advertising | PT Bank vs. JD SPORTS FASH | PT Bank vs. PLAYTIKA HOLDING DL 01 | PT Bank vs. LG Display Co |
| TERUMO CORP vs. ECHO INVESTMENT ZY | TERUMO CORP vs. Cars Inc | TERUMO CORP vs. CapitaLand Investment Limited | TERUMO CORP vs. CarsalesCom |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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