Correlation Between PT Bank and Waste Connections
Can any of the company-specific risk be diversified away by investing in both PT Bank and Waste Connections 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 Waste Connections 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 Waste Connections, you can compare the effects of market volatilities on PT Bank and Waste Connections 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 Waste Connections. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Waste Connections.
Diversification Opportunities for PT Bank and Waste Connections
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PQ9 and Waste is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and Waste Connections in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Connections 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 Waste Connections. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Connections has no effect on the direction of PT Bank i.e., PT Bank and Waste Connections go up and down completely randomly.
Pair Corralation between PT Bank and Waste Connections
Assuming the 90 days horizon PT Bank Mandiri is expected to generate 4.47 times more return on investment than Waste Connections. However, PT Bank is 4.47 times more volatile than Waste Connections. It trades about 0.04 of its potential returns per unit of risk. Waste Connections is currently generating about 0.1 per unit of risk. If you would invest 29.00 in PT Bank Mandiri on August 31, 2024 and sell it today you would earn a total of 11.00 from holding PT Bank Mandiri or generate 37.93% 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. Waste Connections
Performance |
| Timeline |
| PT Bank Mandiri |
| Waste Connections |
PT Bank and Waste Connections Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Waste Connections
The main advantage of trading using opposite PT Bank and Waste Connections positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Waste Connections 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 Waste Connections will offset losses from the drop in Waste Connections' 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 |
| Waste Connections vs. Veolia Environnement SA | Waste Connections vs. GFL ENVIRONM | Waste Connections vs. Superior Plus Corp | Waste Connections vs. NMI Holdings |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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