Correlation Between PT Soho and Bank Pembangunan
Can any of the company-specific risk be diversified away by investing in both PT Soho and Bank Pembangunan 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 Soho and Bank Pembangunan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Soho Global and Bank Pembangunan Daerah, you can compare the effects of market volatilities on PT Soho and Bank Pembangunan 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 Soho with a short position of Bank Pembangunan. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Soho and Bank Pembangunan.
Diversification Opportunities for PT Soho and Bank Pembangunan
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SOHO and Bank is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding PT Soho Global and Bank Pembangunan Daerah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Pembangunan Daerah and PT Soho 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 Soho Global are associated (or correlated) with Bank Pembangunan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Pembangunan Daerah has no effect on the direction of PT Soho i.e., PT Soho and Bank Pembangunan go up and down completely randomly.
Pair Corralation between PT Soho and Bank Pembangunan
Assuming the 90 days trading horizon PT Soho Global is expected to under-perform the Bank Pembangunan. But the stock apears to be less risky and, when comparing its historical volatility, PT Soho Global is 9.45 times less risky than Bank Pembangunan. The stock trades about -0.05 of its potential returns per unit of risk. The Bank Pembangunan Daerah is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,100 in Bank Pembangunan Daerah on August 24, 2024 and sell it today you would earn a total of 300.00 from holding Bank Pembangunan Daerah or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Soho Global vs. Bank Pembangunan Daerah
Performance |
| Timeline |
| PT Soho Global |
| Bank Pembangunan Daerah |
PT Soho and Bank Pembangunan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Soho and Bank Pembangunan
The main advantage of trading using opposite PT Soho and Bank Pembangunan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Soho position performs unexpectedly, Bank Pembangunan 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 Bank Pembangunan will offset losses from the drop in Bank Pembangunan's long position.| PT Soho vs. Phapros Tbk PT | PT Soho vs. Prodia Widyahusada Tbk | PT Soho vs. Sarana Meditama Metropolitan | PT Soho vs. Metro Healthcare Indonesia |
| Bank Pembangunan vs. Maskapai Reasuransi Indonesia | Bank Pembangunan vs. Paninvest Tbk | Bank Pembangunan vs. Bank Mayapada Internasional | Bank Pembangunan vs. Asuransi Dayin Mitra |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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