Correlation Between PT Bank and Fanuc

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

Diversification Opportunities for PT Bank and Fanuc

0.0

Correlation Coefficient

PT Bank  Fanuc

Pay attention - limited upside

The 3 months correlation between BYRA and Fanuc is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Fanuc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fanuc 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 Fanuc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fanuc has no effect on the direction of PT Bank i.e., PT Bank and Fanuc go up and down completely randomly.

Pair Corralation between PT Bank and Fanuc

Assuming the 90 days trading horizon PT Bank Rakyat is expected to under-perform the Fanuc. In addition to that, PT Bank is 3.78 times more volatile than Fanuc. It trades about -0.01 of its total potential returns per unit of risk. Fanuc is currently generating about 0.07 per unit of volatility. If you would invest  2,473  in Fanuc on December 20, 2024 and sell it today you would earn a total of  187.00  from holding Fanuc or generate 7.56% return on investment over 90 days.

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

PT Bank Rakyat  vs.  Fanuc

PT Bank Rakyat

Risk-Adjusted Performance

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 nearly stable basic indicators, PT Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Fanuc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fanuc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Fanuc may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with PT Bank and Fanuc

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

The idea behind PT Bank Rakyat and Fanuc 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.