Correlation Between PT Bank and Blue Whale

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

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

Diversification Opportunities for PT Bank and Blue Whale

-0.63

Correlation Coefficient

PT Bank  Blue Whale

Excellent diversification

The 3 months correlation between BKRKF and Blue is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Blue Whale Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Whale Acquisition and PT 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 PT Bank Rakyat are associated (or correlated) with Blue Whale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Whale Acquisition has no effect on the direction of PT Bank i.e., PT Bank and Blue Whale go up and down completely randomly.

Pair Corralation between PT Bank and Blue Whale

If you would invest  27.00  in PT Bank Rakyat on September 17, 2024 and sell it today you would lose (1.00) from holding PT Bank Rakyat or give up 3.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.0%
Values	Daily Returns

PT Bank Rakyat  vs.  Blue Whale Acquisition

PT Bank Rakyat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Bank Rakyat has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward-looking signals remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Blue Whale Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Whale Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Blue Whale is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with PT Bank and Blue Whale

The main advantage of trading using opposite PT Bank and Blue Whale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Blue Whale 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 Blue Whale will offset losses from the drop in Blue Whale's long position.

The idea behind PT Bank Rakyat and Blue Whale Acquisition 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.