Correlation Between PT Bank and Dalrada Financial

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

Diversification Opportunities for PT Bank and Dalrada Financial

0.05

Correlation Coefficient

PT Bank  Dalrada Financial

Significant diversification

The 3 months correlation between BKRKF and Dalrada is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Dalrada Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalrada Financial Corp 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 Dalrada Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalrada Financial Corp has no effect on the direction of PT Bank i.e., PT Bank and Dalrada Financial go up and down completely randomly.

Pair Corralation between PT Bank and Dalrada Financial

Assuming the 90 days horizon PT Bank is expected to generate 33.33 times less return on investment than Dalrada Financial. But when comparing it to its historical volatility, PT Bank Rakyat is 12.32 times less risky than Dalrada Financial. It trades about 0.05 of its potential returns per unit of risk. Dalrada Financial Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  6.20  in Dalrada Financial Corp on December 29, 2024 and sell it today you would lose (5.10) from holding Dalrada Financial Corp or give up 82.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

PT Bank Rakyat  vs.  Dalrada Financial Corp

PT Bank Rakyat

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PT Bank Rakyat are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, PT Bank reported solid returns over the last few months and may actually be approaching a breakup point.

Dalrada Financial Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dalrada Financial Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady fundamental indicators, Dalrada Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Bank and Dalrada Financial

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

The idea behind PT Bank Rakyat and Dalrada Financial Corp 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..