Correlation Between PT Bank and CYIOS

Can any of the company-specific risk be diversified away by investing in both PT Bank and CYIOS 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 CYIOS 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 CYIOS, you can compare the effects of market volatilities on PT Bank and CYIOS 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 CYIOS. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and CYIOS.

Diversification Opportunities for PT Bank and CYIOS

0.21

Correlation Coefficient

PT Bank  CYIOS

Modest diversification

The 3 months correlation between BKRKF and CYIOS is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and CYIOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CYIOS 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 CYIOS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CYIOS has no effect on the direction of PT Bank i.e., PT Bank and CYIOS go up and down completely randomly.

Pair Corralation between PT Bank and CYIOS

Assuming the 90 days horizon PT Bank Rakyat is expected to generate 1.09 times more return on investment than CYIOS. However, PT Bank is 1.09 times more volatile than CYIOS. It trades about 0.01 of its potential returns per unit of risk. CYIOS is currently generating about -0.01 per unit of risk. If you would invest  23.00  in PT Bank Rakyat on December 25, 2024 and sell it today you would lose (4.00) from holding PT Bank Rakyat or give up 17.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.0%
Values	Daily Returns

PT Bank Rakyat  vs.  CYIOS

PT Bank Rakyat

Risk-Adjusted Performance

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 nearly fragile forward-looking signals, PT Bank may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CYIOS

Risk-Adjusted Performance

Very Weak

Over the last 90 days CYIOS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with PT Bank and CYIOS

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

The idea behind PT Bank Rakyat and CYIOS 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.