Correlation Between PT Bank and URBAN OUTFITTERS
Can any of the company-specific risk be diversified away by investing in both PT Bank and URBAN OUTFITTERS 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 URBAN OUTFITTERS 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 URBAN OUTFITTERS, you can compare the effects of market volatilities on PT Bank and URBAN OUTFITTERS 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 URBAN OUTFITTERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and URBAN OUTFITTERS.
Diversification Opportunities for PT Bank and URBAN OUTFITTERS
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PQ9 and URBAN is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and URBAN OUTFITTERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on URBAN OUTFITTERS 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 URBAN OUTFITTERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of URBAN OUTFITTERS has no effect on the direction of PT Bank i.e., PT Bank and URBAN OUTFITTERS go up and down completely randomly.
Pair Corralation between PT Bank and URBAN OUTFITTERS
Assuming the 90 days horizon PT Bank Mandiri is expected to under-perform the URBAN OUTFITTERS. In addition to that, PT Bank is 1.16 times more volatile than URBAN OUTFITTERS. It trades about -0.2 of its total potential returns per unit of risk. URBAN OUTFITTERS is currently generating about 0.18 per unit of volatility. If you would invest 3,240 in URBAN OUTFITTERS on August 24, 2024 and sell it today you would earn a total of 300.00 from holding URBAN OUTFITTERS or generate 9.26% 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. URBAN OUTFITTERS
Performance |
| Timeline |
| PT Bank Mandiri |
| URBAN OUTFITTERS |
PT Bank and URBAN OUTFITTERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and URBAN OUTFITTERS
The main advantage of trading using opposite PT Bank and URBAN OUTFITTERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, URBAN OUTFITTERS 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 URBAN OUTFITTERS will offset losses from the drop in URBAN OUTFITTERS's long position.| PT Bank vs. Lion One Metals | PT Bank vs. Perseus Mining Limited | PT Bank vs. AOI Electronics Co | PT Bank vs. ADRIATIC METALS LS 013355 |
| URBAN OUTFITTERS vs. Apple Inc | URBAN OUTFITTERS vs. Apple Inc | URBAN OUTFITTERS vs. Apple Inc | URBAN OUTFITTERS vs. Apple Inc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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