Correlation Between Territorial Bancorp and PT Bank
Can any of the company-specific risk be diversified away by investing in both Territorial Bancorp 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 Territorial Bancorp and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Territorial Bancorp and PT Bank Rakyat, you can compare the effects of market volatilities on Territorial Bancorp 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 Territorial Bancorp with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Territorial Bancorp and PT Bank.
Diversification Opportunities for Territorial Bancorp and PT Bank
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Territorial and BKRKF is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Territorial Bancorp 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 Territorial Bancorp 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 Territorial Bancorp 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 Territorial Bancorp i.e., Territorial Bancorp and PT Bank go up and down completely randomly.
Pair Corralation between Territorial Bancorp and PT Bank
Given the investment horizon of 90 days Territorial Bancorp is expected to generate 0.41 times more return on investment than PT Bank. However, Territorial Bancorp is 2.42 times less risky than PT Bank. It trades about 0.14 of its potential returns per unit of risk. PT Bank Rakyat is currently generating about -0.08 per unit of risk. If you would invest 1,008 in Territorial Bancorp on September 4, 2024 and sell it today you would earn a total of 76.00 from holding Territorial Bancorp or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Territorial Bancorp vs. PT Bank Rakyat
Performance |
| Timeline |
| Territorial Bancorp |
| PT Bank Rakyat |
Territorial Bancorp and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Territorial Bancorp and PT Bank
The main advantage of trading using opposite Territorial Bancorp and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Territorial Bancorp 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.| Territorial Bancorp vs. International Bancshares | Territorial Bancorp vs. Finward Bancorp | Territorial Bancorp vs. Aquagold International | Territorial Bancorp vs. Thrivent High Yield |
| PT Bank vs. First Hawaiian | PT Bank vs. Central Pacific Financial | PT Bank vs. Territorial Bancorp | PT Bank vs. Comerica |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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