Correlation Between PT Bank and JCTCF Old

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

Diversification Opportunities for PT Bank and JCTCF Old

-0.36

Correlation Coefficient

PT Bank  JCTCF Old

Very good diversification

The 3 months correlation between BKRKF and JCTCF is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and JCTCF Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JCTCF Old 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 JCTCF Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JCTCF Old has no effect on the direction of PT Bank i.e., PT Bank and JCTCF Old go up and down completely randomly.

Pair Corralation between PT Bank and JCTCF Old

If you would invest  489.00  in JCTCF Old on October 10, 2024 and sell it today you would earn a total of  0.00  from holding JCTCF Old or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

PT Bank Rakyat  vs.  JCTCF Old

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 latest fragile performance, the Stock's forward-looking signals remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

JCTCF Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JCTCF Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, JCTCF Old is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PT Bank and JCTCF Old

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

The idea behind PT Bank Rakyat and JCTCF Old 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.