Correlation Between PT Bank and Fat Projects

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

Diversification Opportunities for PT Bank and Fat Projects

0.0

Correlation Coefficient

PT Bank  Fat Projects

Pay attention - limited upside

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

Pair Corralation between PT Bank and Fat Projects

If you would invest  36.00  in PT Bank Rakyat on October 25, 2024 and sell it today you would lose (11.00) from holding PT Bank Rakyat or give up 30.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.49%
Values	Daily Returns

PT Bank Rakyat  vs.  Fat Projects Acquisition

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 nearly stable forward-looking signals, PT Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Fat Projects Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fat Projects Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Fat Projects is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with PT Bank and Fat Projects

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

The idea behind PT Bank Rakyat and Fat Projects Acquisition 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.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.