Correlation Between PT Bank and Uwharrie Capital

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

Diversification Opportunities for PT Bank and Uwharrie Capital

-0.53

Correlation Coefficient

PT Bank  Uwharrie Capital

Excellent diversification

The 3 months correlation between BKRKF and Uwharrie is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Uwharrie Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uwharrie Capital Corp 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 Uwharrie Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uwharrie Capital Corp has no effect on the direction of PT Bank i.e., PT Bank and Uwharrie Capital go up and down completely randomly.

Pair Corralation between PT Bank and Uwharrie Capital

Assuming the 90 days horizon PT Bank Rakyat is expected to under-perform the Uwharrie Capital. In addition to that, PT Bank is 3.24 times more volatile than Uwharrie Capital Corp. It trades about -0.19 of its total potential returns per unit of risk. Uwharrie Capital Corp is currently generating about 0.04 per unit of volatility. If you would invest  840.00  in Uwharrie Capital Corp on October 8, 2024 and sell it today you would earn a total of  10.00  from holding Uwharrie Capital Corp or generate 1.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

PT Bank Rakyat  vs.  Uwharrie Capital Corp

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.

Uwharrie Capital Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Uwharrie Capital Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical indicators, Uwharrie Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with PT Bank and Uwharrie Capital

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

The idea behind PT Bank Rakyat and Uwharrie Capital Corp 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.