Correlation Between PT Bank and Landcadia Holdings

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

Diversification Opportunities for PT Bank and Landcadia Holdings

0.0

Correlation Coefficient

PT Bank  Landcadia Holdings

Pay attention - limited upside

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

Pair Corralation between PT Bank and Landcadia Holdings

Assuming the 90 days horizon PT Bank Rakyat is expected to generate 10.46 times more return on investment than Landcadia Holdings. However, PT Bank is 10.46 times more volatile than Landcadia Holdings II. It trades about 0.02 of its potential returns per unit of risk. Landcadia Holdings II is currently generating about 0.03 per unit of risk. If you would invest  26.00  in PT Bank Rakyat on October 7, 2024 and sell it today you would lose (4.00) from holding PT Bank Rakyat or give up 15.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	32.02%
Values	Daily Returns

PT Bank Rakyat  vs.  Landcadia Holdings II

PT Bank Rakyat

Risk-Adjusted Performance

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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 fragile performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Landcadia Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Landcadia Holdings II has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, Landcadia Holdings 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 Landcadia Holdings

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

The idea behind PT Bank Rakyat and Landcadia Holdings II 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.