Correlation Between PT Global and Target
Can any of the company-specific risk be diversified away by investing in both PT Global and Target 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 Global and Target into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Global Mediacom and Target, you can compare the effects of market volatilities on PT Global and Target 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 Global with a short position of Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Global and Target.
Diversification Opportunities for PT Global and Target
Modest diversification
The 3 months correlation between 06L and Target is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding PT Global Mediacom and Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target and PT Global 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 Global Mediacom are associated (or correlated) with Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target has no effect on the direction of PT Global i.e., PT Global and Target go up and down completely randomly.
Pair Corralation between PT Global and Target
Assuming the 90 days trading horizon PT Global Mediacom is expected to under-perform the Target. In addition to that, PT Global is 6.22 times more volatile than Target. It trades about -0.28 of its total potential returns per unit of risk. Target is currently generating about -0.22 per unit of volatility. If you would invest 12,989 in Target on December 5, 2024 and sell it today you would lose (1,079) from holding Target or give up 8.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PT Global Mediacom vs. Target
Performance |
Timeline |
PT Global Mediacom |
Target |
PT Global and Target Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Global and Target
The main advantage of trading using opposite PT Global and Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Global position performs unexpectedly, Target 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 Target will offset losses from the drop in Target's long position.PT Global vs. COLUMBIA SPORTSWEAR | PT Global vs. PARKEN SPORT ENT | PT Global vs. Gaztransport et technigaz | PT Global vs. Guangdong Investment Limited |
Target vs. Caseys General Stores | Target vs. Cardinal Health | Target vs. SWISS WATER DECAFFCOFFEE | Target vs. GOME Retail Holdings |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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