Correlation Between PT Bank and Vendetta Mining

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

Diversification Opportunities for PT Bank and Vendetta Mining

0.29

Correlation Coefficient

PT Bank  Vendetta Mining

Modest diversification

The 3 months correlation between BKRKF and Vendetta is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Vendetta Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vendetta Mining 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 Vendetta Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vendetta Mining Corp has no effect on the direction of PT Bank i.e., PT Bank and Vendetta Mining go up and down completely randomly.

Pair Corralation between PT Bank and Vendetta Mining

Assuming the 90 days horizon PT Bank is expected to generate 3.91 times less return on investment than Vendetta Mining. But when comparing it to its historical volatility, PT Bank Rakyat is 1.55 times less risky than Vendetta Mining. It trades about 0.05 of its potential returns per unit of risk. Vendetta Mining Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  0.86  in Vendetta Mining Corp on December 29, 2024 and sell it today you would earn a total of  0.64  from holding Vendetta Mining Corp or generate 74.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	92.06%
Values	Daily Returns

PT Bank Rakyat  vs.  Vendetta Mining Corp

PT Bank Rakyat

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PT Bank Rakyat are ranked lower than 3 (%) 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.

Vendetta Mining Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vendetta Mining Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Vendetta Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Bank and Vendetta Mining

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

The idea behind PT Bank Rakyat and Vendetta Mining 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.