Correlation Between PT Bank and BlackRock ESG

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

Diversification Opportunities for PT Bank and BlackRock ESG

-0.69

Correlation Coefficient

PT Bank  BlackRock ESG

Excellent diversification

The 3 months correlation between BKRKF and BlackRock is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and BlackRock ESG Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock ESG Capital 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 BlackRock ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock ESG Capital has no effect on the direction of PT Bank i.e., PT Bank and BlackRock ESG go up and down completely randomly.

Pair Corralation between PT Bank and BlackRock ESG

Assuming the 90 days horizon PT Bank Rakyat is expected to under-perform the BlackRock ESG. In addition to that, PT Bank is 7.04 times more volatile than BlackRock ESG Capital. It trades about -0.06 of its total potential returns per unit of risk. BlackRock ESG Capital is currently generating about 0.1 per unit of volatility. If you would invest  1,655  in BlackRock ESG Capital on August 31, 2024 and sell it today you would earn a total of  80.00  from holding BlackRock ESG Capital or generate 4.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

PT Bank Rakyat  vs.  BlackRock ESG Capital

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 fragile performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

BlackRock ESG Capital

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock ESG Capital are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, BlackRock ESG is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with PT Bank and BlackRock ESG

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

The idea behind PT Bank Rakyat and BlackRock ESG Capital 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.