Correlation Between Alpha Bank and PT Bank
Can any of the company-specific risk be diversified away by investing in both Alpha Bank 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 Alpha Bank and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alpha Bank SA and PT Bank Rakyat, you can compare the effects of market volatilities on Alpha Bank 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 Alpha Bank with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Bank and PT Bank.
Diversification Opportunities for Alpha Bank and PT Bank
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alpha and BKRKF is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Bank SA 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 Alpha Bank 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 Alpha Bank SA 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 Alpha Bank i.e., Alpha Bank and PT Bank go up and down completely randomly.
Pair Corralation between Alpha Bank and PT Bank
Assuming the 90 days horizon Alpha Bank is expected to generate 2.43 times less return on investment than PT Bank. But when comparing it to its historical volatility, Alpha Bank SA is 3.79 times less risky than PT Bank. It trades about 0.13 of its potential returns per unit of risk. PT Bank Rakyat is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 22.00 in PT Bank Rakyat on December 2, 2024 and sell it today you would earn a total of 2.00 from holding PT Bank Rakyat or generate 9.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Alpha Bank SA vs. PT Bank Rakyat
Performance |
Timeline |
Alpha Bank SA |
PT Bank Rakyat |
Alpha Bank and PT Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alpha Bank and PT Bank
The main advantage of trading using opposite Alpha Bank and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpha Bank 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.Alpha Bank vs. National Bank of | Alpha Bank vs. Piraeus Bank SA | Alpha Bank vs. Eurobank Ergasias SA | Alpha Bank vs. First Citizens BancShares |
PT Bank vs. HDFC Bank Limited | PT Bank vs. China Merchants Bank | PT Bank vs. China Merchants Bank | PT Bank vs. Fifth Third Bancorp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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