Correlation Between PT Bank and Tytan Holdings

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

Diversification Opportunities for PT Bank and Tytan Holdings

0.71

Correlation Coefficient

PT Bank  Tytan Holdings

Poor diversification

The 3 months correlation between BKRKF and Tytan is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Tytan Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tytan 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 Tytan Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tytan Holdings has no effect on the direction of PT Bank i.e., PT Bank and Tytan Holdings go up and down completely randomly.

Pair Corralation between PT Bank and Tytan Holdings

Assuming the 90 days horizon PT Bank Rakyat is expected to under-perform the Tytan Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Bank Rakyat is 15.62 times less risky than Tytan Holdings. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Tytan Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  0.40  in Tytan Holdings on October 4, 2024 and sell it today you would lose (0.38) from holding Tytan Holdings or give up 95.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.43%
Values	Daily Returns

PT Bank Rakyat  vs.  Tytan Holdings

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.

Tytan Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tytan Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with PT Bank and Tytan Holdings

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

The idea behind PT Bank Rakyat and Tytan Holdings 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..