Correlation Between PT Bank and Indus Realty

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

Diversification Opportunities for PT Bank and Indus Realty

-0.82

Correlation Coefficient

PT Bank  Indus Realty

Pay attention - limited upside

The 3 months correlation between BKRKF and Indus is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Indus Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indus Realty Trust 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 Indus Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indus Realty Trust has no effect on the direction of PT Bank i.e., PT Bank and Indus Realty go up and down completely randomly.

Pair Corralation between PT Bank and Indus Realty

If you would invest  26.00  in PT Bank Rakyat on September 1, 2024 and sell it today you would lose (1.00) from holding PT Bank Rakyat or give up 3.85% of portfolio value over 90 days.

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

PT Bank Rakyat  vs.  Indus Realty Trust

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 weak 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.

Indus Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indus Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Indus Realty is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with PT Bank and Indus Realty

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

The idea behind PT Bank Rakyat and Indus Realty Trust 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.