Correlation Between CHEMICAL INDUSTRIES and PT Bank
Can any of the company-specific risk be diversified away by investing in both CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHEMICAL INDUSTRIES and PT Bank Maybank, you can compare the effects of market volatilities on CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHEMICAL INDUSTRIES and PT Bank.
Diversification Opportunities for CHEMICAL INDUSTRIES and PT Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHEMICAL and BOZA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHEMICAL INDUSTRIES and PT Bank Maybank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Maybank and CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES 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 Maybank has no effect on the direction of CHEMICAL INDUSTRIES i.e., CHEMICAL INDUSTRIES and PT Bank go up and down completely randomly.
Pair Corralation between CHEMICAL INDUSTRIES and PT Bank
Assuming the 90 days trading horizon CHEMICAL INDUSTRIES is expected to generate 4.16 times less return on investment than PT Bank. But when comparing it to its historical volatility, CHEMICAL INDUSTRIES is 13.21 times less risky than PT Bank. It trades about 0.09 of its potential returns per unit of risk. PT Bank Maybank is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1.25 in PT Bank Maybank on September 3, 2024 and sell it today you would earn a total of 0.00 from holding PT Bank Maybank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
CHEMICAL INDUSTRIES vs. PT Bank Maybank
Performance |
| Timeline |
| CHEMICAL INDUSTRIES |
| PT Bank Maybank |
CHEMICAL INDUSTRIES and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHEMICAL INDUSTRIES and PT Bank
The main advantage of trading using opposite CHEMICAL INDUSTRIES and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHEMICAL INDUSTRIES 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.| CHEMICAL INDUSTRIES vs. KOOL2PLAY SA ZY | CHEMICAL INDUSTRIES vs. PLAYTIKA HOLDING DL 01 | CHEMICAL INDUSTRIES vs. SHIP HEALTHCARE HLDGINC | CHEMICAL INDUSTRIES vs. Brockhaus Capital Management |
| PT Bank vs. Iridium Communications | PT Bank vs. Gamma Communications plc | PT Bank vs. Ming Le Sports | PT Bank vs. Jacquet Metal Service |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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