Correlation Between State Bank and PT Bank
Can any of the company-specific risk be diversified away by investing in both State Bank and PT Bank 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 State Bank and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Bank of and PT Bank Central, you can compare the effects of market volatilities on State Bank and PT Bank 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 State Bank with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and PT Bank.
Diversification Opportunities for State Bank and PT Bank
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between State and BZG2 is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and PT Bank Central in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Central and State 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 State Bank of are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Central has no effect on the direction of State Bank i.e., State Bank and PT Bank go up and down completely randomly.
Pair Corralation between State Bank and PT Bank
Assuming the 90 days horizon State Bank of is expected to generate 0.47 times more return on investment than PT Bank. However, State Bank of is 2.14 times less risky than PT Bank. It trades about 0.09 of its potential returns per unit of risk. PT Bank Central is currently generating about 0.03 per unit of risk. If you would invest 5,988 in State Bank of on August 25, 2024 and sell it today you would earn a total of 2,912 from holding State Bank of or generate 48.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. PT Bank Central
Performance |
| Timeline |
| State Bank |
| PT Bank Central |
State Bank and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and PT Bank
The main advantage of trading using opposite State Bank and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| State Bank vs. HDFC Bank Limited | State Bank vs. PT Bank Central | State Bank vs. DBS Group Holdings | State Bank vs. PT Bank Rakyat |
| PT Bank vs. Motorcar Parts of | PT Bank vs. Fidelity National Information | PT Bank vs. Data3 Limited | PT Bank vs. Geely Automobile 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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