Correlation Between PT Bank and Edgio
Can any of the company-specific risk be diversified away by investing in both PT Bank and Edgio 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 Edgio 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 Edgio Inc, you can compare the effects of market volatilities on PT Bank and Edgio 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 Edgio. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Edgio.
Diversification Opportunities for PT Bank and Edgio
Poor diversification
The 3 months correlation between BKRKF and Edgio is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Edgio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgio Inc 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 Edgio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgio Inc has no effect on the direction of PT Bank i.e., PT Bank and Edgio go up and down completely randomly.
Pair Corralation between PT Bank and Edgio
Assuming the 90 days horizon PT Bank Rakyat is expected to under-perform the Edgio. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Bank Rakyat is 38.62 times less risky than Edgio. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Edgio Inc is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Edgio Inc on October 27, 2024 and sell it today you would lose (1.00) from holding Edgio Inc or give up 33.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 30.0% |
Values | Daily Returns |
PT Bank Rakyat vs. Edgio Inc
Performance |
Timeline |
PT Bank Rakyat |
Edgio Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
PT Bank and Edgio Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Bank and Edgio
The main advantage of trading using opposite PT Bank and Edgio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Edgio 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 Edgio will offset losses from the drop in Edgio's long position.PT Bank vs. Bank Mandiri Persero | ||
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Check out your portfolio center.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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