Correlation Between PT Steel and ALEFARM BREWING
Can any of the company-specific risk be diversified away by investing in both PT Steel and ALEFARM BREWING 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 Steel and ALEFARM BREWING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Steel Pipe and ALEFARM BREWING DK 05, you can compare the effects of market volatilities on PT Steel and ALEFARM BREWING 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 Steel with a short position of ALEFARM BREWING. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Steel and ALEFARM BREWING.
Diversification Opportunities for PT Steel and ALEFARM BREWING
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between S08 and ALEFARM is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding PT Steel Pipe and ALEFARM BREWING DK 05 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALEFARM BREWING DK and PT Steel 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 Steel Pipe are associated (or correlated) with ALEFARM BREWING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALEFARM BREWING DK has no effect on the direction of PT Steel i.e., PT Steel and ALEFARM BREWING go up and down completely randomly.
Pair Corralation between PT Steel and ALEFARM BREWING
Assuming the 90 days horizon PT Steel Pipe is expected to generate 2.28 times more return on investment than ALEFARM BREWING. However, PT Steel is 2.28 times more volatile than ALEFARM BREWING DK 05. It trades about 0.01 of its potential returns per unit of risk. ALEFARM BREWING DK 05 is currently generating about 0.02 per unit of risk. If you would invest 1.20 in PT Steel Pipe on October 17, 2024 and sell it today you would lose (0.05) from holding PT Steel Pipe or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Steel Pipe vs. ALEFARM BREWING DK 05
Performance |
| Timeline |
| PT Steel Pipe |
| ALEFARM BREWING DK |
PT Steel and ALEFARM BREWING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Steel and ALEFARM BREWING
The main advantage of trading using opposite PT Steel and ALEFARM BREWING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Steel position performs unexpectedly, ALEFARM BREWING 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 ALEFARM BREWING will offset losses from the drop in ALEFARM BREWING's long position.| PT Steel vs. HEALTHSTREAM | PT Steel vs. Playmates Toys Limited | PT Steel vs. USWE SPORTS AB | PT Steel vs. PURETECH HEALTH PLC |
| ALEFARM BREWING vs. TOMBADOR IRON LTD | ALEFARM BREWING vs. ARDAGH METAL PACDL 0001 | ALEFARM BREWING vs. United States Steel | ALEFARM BREWING vs. PT Steel Pipe |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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