Correlation Between PT Bank and Data Modul

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

Diversification Opportunities for PT Bank and Data Modul

-0.3

Correlation Coefficient

PT Bank  Data Modul

Very good diversification

The 3 months correlation between BYRA and Data is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Data Modul AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data Modul AG 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 Data Modul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data Modul AG has no effect on the direction of PT Bank i.e., PT Bank and Data Modul go up and down completely randomly.

Pair Corralation between PT Bank and Data Modul

Assuming the 90 days trading horizon PT Bank Rakyat is expected to under-perform the Data Modul. In addition to that, PT Bank is 2.39 times more volatile than Data Modul AG. It trades about -0.01 of its total potential returns per unit of risk. Data Modul AG is currently generating about -0.02 per unit of volatility. If you would invest  2,760  in Data Modul AG on October 6, 2024 and sell it today you would lose (80.00) from holding Data Modul AG or give up 2.9% of portfolio value over 90 days.

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

PT Bank Rakyat  vs.  Data Modul AG

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 unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Data Modul AG

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Data Modul AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain primary indicators, Data Modul may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with PT Bank and Data Modul

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

The idea behind PT Bank Rakyat and Data Modul AG 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.