Correlation Between Siamgas and PT Bank

Can any of the company-specific risk be diversified away by investing in both Siamgas 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 Siamgas and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Siamgas And Petrochemicals and PT Bank Mandiri, you can compare the effects of market volatilities on Siamgas 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 Siamgas with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamgas and PT Bank.

Diversification Opportunities for Siamgas and PT Bank

0.16

Correlation Coefficient

Siamgas  PT Bank

Average diversification

The 3 months correlation between Siamgas and PQ9 is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas And Petrochemicals and PT Bank Mandiri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Mandiri and Siamgas 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 Siamgas And Petrochemicals 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 Mandiri has no effect on the direction of Siamgas i.e., Siamgas and PT Bank go up and down completely randomly.

Pair Corralation between Siamgas and PT Bank

Assuming the 90 days trading horizon Siamgas And Petrochemicals is expected to generate 0.72 times more return on investment than PT Bank. However, Siamgas And Petrochemicals is 1.38 times less risky than PT Bank. It trades about 0.01 of its potential returns per unit of risk. PT Bank Mandiri is currently generating about -0.08 per unit of risk. If you would invest  18.00  in Siamgas And Petrochemicals on September 22, 2024 and sell it today you would earn a total of  0.00  from holding Siamgas And Petrochemicals or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Siamgas And Petrochemicals  vs.  PT Bank Mandiri

Siamgas And Petroche

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Siamgas And Petrochemicals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Siamgas is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

PT Bank Mandiri

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Bank Mandiri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Siamgas and PT Bank

The main advantage of trading using opposite Siamgas and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siamgas 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.

The idea behind Siamgas And Petrochemicals and PT Bank Mandiri pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Valuation module to check real value of public entities based on technical and fundamental data.