Correlation Between PT Bank and Dune Acquisition

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

Diversification Opportunities for PT Bank and Dune Acquisition

0.0

Correlation Coefficient

PT Bank  Dune Acquisition

Pay attention - limited upside

The 3 months correlation between BKRKF and Dune is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Dune Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dune Acquisition 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 Dune Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dune Acquisition Corp has no effect on the direction of PT Bank i.e., PT Bank and Dune Acquisition go up and down completely randomly.

Pair Corralation between PT Bank and Dune Acquisition

If you would invest  23.00  in PT Bank Rakyat on December 21, 2024 and sell it today you would lose (1.00) from holding PT Bank Rakyat or give up 4.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PT Bank Rakyat  vs.  Dune Acquisition Corp

PT Bank Rakyat

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Bank Rakyat are ranked lower than 2 (%) 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.

Dune Acquisition Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with PT Bank and Dune Acquisition

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

The idea behind PT Bank Rakyat and Dune Acquisition 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.