Correlation Between PT Bank and Home Plate

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

Diversification Opportunities for PT Bank and Home Plate

0.7

Correlation Coefficient

PT Bank  Home Plate

Poor diversification

The 3 months correlation between BKRKF and Home is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Home Plate Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Plate 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 Home Plate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Plate Acquisition has no effect on the direction of PT Bank i.e., PT Bank and Home Plate go up and down completely randomly.

Pair Corralation between PT Bank and Home Plate

If you would invest  28.00  in PT Bank Rakyat on September 12, 2024 and sell it today you would earn a total of  1.00  from holding PT Bank Rakyat or generate 3.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

PT Bank Rakyat  vs.  Home Plate 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.

Home Plate Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Home Plate Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Home Plate is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with PT Bank and Home Plate

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

The idea behind PT Bank Rakyat and Home Plate 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.