Correlation Between PT Bank and Valero Energy
Can any of the company-specific risk be diversified away by investing in both PT Bank and Valero Energy 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 Valero Energy 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 Valero Energy, you can compare the effects of market volatilities on PT Bank and Valero Energy 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 Valero Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Valero Energy.
Diversification Opportunities for PT Bank and Valero Energy
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between PQ9 and Valero is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and Valero Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valero Energy 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 Valero Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valero Energy has no effect on the direction of PT Bank i.e., PT Bank and Valero Energy go up and down completely randomly.
Pair Corralation between PT Bank and Valero Energy
Assuming the 90 days horizon PT Bank Mandiri is expected to generate 2.43 times more return on investment than Valero Energy. However, PT Bank is 2.43 times more volatile than Valero Energy. It trades about 0.02 of its potential returns per unit of risk. Valero Energy is currently generating about 0.01 per unit of risk. If you would invest 35.00 in PT Bank Mandiri on October 1, 2024 and sell it today you would lose (3.00) from holding PT Bank Mandiri or give up 8.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Mandiri vs. Valero Energy
Performance |
| Timeline |
| PT Bank Mandiri |
| Valero Energy |
PT Bank and Valero Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Valero Energy
The main advantage of trading using opposite PT Bank and Valero Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Valero Energy 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 Valero Energy will offset losses from the drop in Valero Energy's long position.| PT Bank vs. China Merchants Bank | PT Bank vs. ICICI Bank Limited | PT Bank vs. PT Bank Central | PT Bank vs. DBS Group Holdings |
| Valero Energy vs. Reliance Industries Limited | Valero Energy vs. Marathon Petroleum Corp | Valero Energy vs. NESTE OYJ UNSPADR | Valero Energy vs. Polski Koncern Naftowy |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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