Correlation Between PT Bank and Logistics Innovation

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

Diversification Opportunities for PT Bank and Logistics Innovation

0.66

Correlation Coefficient

PT Bank  Logistics Innovation

Poor diversification

The 3 months correlation between BKRKF and Logistics is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Logistics Innovation Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logistics Innovation 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 Logistics Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logistics Innovation has no effect on the direction of PT Bank i.e., PT Bank and Logistics Innovation go up and down completely randomly.

Pair Corralation between PT Bank and Logistics Innovation

If you would invest  27.00  in PT Bank Rakyat on September 17, 2024 and sell it today you would lose (1.00) from holding PT Bank Rakyat or give up 3.7% of portfolio value over 90 days.

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

PT Bank Rakyat  vs.  Logistics Innovation Technolog

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 weak 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.

Logistics Innovation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Logistics Innovation Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Logistics Innovation 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 Logistics Innovation

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

The idea behind PT Bank Rakyat and Logistics Innovation Technologies 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.