Correlation Between Snowflake and PT Bank
Can any of the company-specific risk be diversified away by investing in both Snowflake 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 Snowflake and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snowflake and PT Bank Rakyat, you can compare the effects of market volatilities on Snowflake 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 Snowflake with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snowflake and PT Bank.
Diversification Opportunities for Snowflake and PT Bank
Very good diversification
The 3 months correlation between Snowflake and BKRKF is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Snowflake and PT Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Rakyat and Snowflake 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 Snowflake 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 Rakyat has no effect on the direction of Snowflake i.e., Snowflake and PT Bank go up and down completely randomly.
Pair Corralation between Snowflake and PT Bank
Given the investment horizon of 90 days Snowflake is expected to generate 1.06 times less return on investment than PT Bank. But when comparing it to its historical volatility, Snowflake is 4.55 times less risky than PT Bank. It trades about 0.2 of its potential returns per unit of risk. PT Bank Rakyat is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 24.00 in PT Bank Rakyat on November 18, 2024 and sell it today you would earn a total of 0.00 from holding PT Bank Rakyat or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snowflake vs. PT Bank Rakyat
Performance |
| Timeline |
| Snowflake |
| PT Bank Rakyat |
Snowflake and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snowflake and PT Bank
The main advantage of trading using opposite Snowflake and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snowflake 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.The idea behind Snowflake and PT Bank Rakyat pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| PT Bank vs. Banco Bradesco SA | PT Bank vs. Itau Unibanco Banco | PT Bank vs. Lloyds Banking Group | PT Bank vs. Deutsche Bank AG |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |