Correlation Between PT Bank and TEGNA

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

Diversification Opportunities for PT Bank and TEGNA

0.57

Correlation Coefficient

PT Bank  TEGNA

Very weak diversification

The 3 months correlation between BYRA and TEGNA is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and TEGNA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TEGNA Inc 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 TEGNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TEGNA Inc has no effect on the direction of PT Bank i.e., PT Bank and TEGNA go up and down completely randomly.

Pair Corralation between PT Bank and TEGNA

Assuming the 90 days trading horizon PT Bank Rakyat is expected to under-perform the TEGNA. In addition to that, PT Bank is 3.68 times more volatile than TEGNA Inc. It trades about -0.02 of its total potential returns per unit of risk. TEGNA Inc is currently generating about -0.04 per unit of volatility. If you would invest  1,757  in TEGNA Inc on December 22, 2024 and sell it today you would lose (97.00) from holding TEGNA Inc or give up 5.52% of portfolio value over 90 days.

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

PT Bank Rakyat  vs.  TEGNA Inc

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 latest fragile 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.

TEGNA Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days TEGNA Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, TEGNA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PT Bank and TEGNA

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

The idea behind PT Bank Rakyat and TEGNA Inc 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.