Correlation Between CARSALES and PT Bank
Can any of the company-specific risk be diversified away by investing in both CARSALES 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 CARSALES and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CARSALESCOM and PT Bank Central, you can compare the effects of market volatilities on CARSALES 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 CARSALES with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARSALES and PT Bank.
Diversification Opportunities for CARSALES and PT Bank
Very good diversification
The 3 months correlation between CARSALES and BZG2 is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding CARSALESCOM 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 CARSALES 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 CARSALESCOM 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 CARSALES i.e., CARSALES and PT Bank go up and down completely randomly.
Pair Corralation between CARSALES and PT Bank
Assuming the 90 days trading horizon CARSALESCOM is expected to generate 0.38 times more return on investment than PT Bank. However, CARSALESCOM is 2.63 times less risky than PT Bank. It trades about 0.14 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 1,897 in CARSALESCOM on November 4, 2024 and sell it today you would earn a total of 543.00 from holding CARSALESCOM or generate 28.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CARSALESCOM vs. PT Bank Central
Performance |
| Timeline |
| CARSALESCOM |
| PT Bank Central |
CARSALES and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CARSALES and PT Bank
The main advantage of trading using opposite CARSALES and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARSALES 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.| CARSALES vs. Fast Retailing Co | CARSALES vs. FAST RETAIL ADR | CARSALES vs. SIDETRADE EO 1 | CARSALES vs. TRADEDOUBLER AB SK |
| PT Bank vs. Air Lease | PT Bank vs. Zoom Video Communications | PT Bank vs. FUYO GENERAL LEASE | PT Bank vs. Sixt Leasing SE |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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