Correlation Between PT Bank and Karam Minerals

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

Diversification Opportunities for PT Bank and Karam Minerals

-0.38

Correlation Coefficient

PT Bank  Karam Minerals

Very good diversification

The 3 months correlation between BKRKF and Karam is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Karam Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karam Minerals 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 Karam Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karam Minerals has no effect on the direction of PT Bank i.e., PT Bank and Karam Minerals go up and down completely randomly.

Pair Corralation between PT Bank and Karam Minerals

If you would invest  17.00  in Karam Minerals on October 11, 2024 and sell it today you would earn a total of  0.00  from holding Karam Minerals or generate 0.0% return on investment over 90 days.

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

PT Bank Rakyat  vs.  Karam Minerals

PT Bank Rakyat

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Bank Rakyat are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, PT Bank reported solid returns over the last few months and may actually be approaching a breakup point.

Karam Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with PT Bank and Karam Minerals

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

The idea behind PT Bank Rakyat and Karam Minerals 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..