Correlation Between PT Bank and Neste Oyj
Can any of the company-specific risk be diversified away by investing in both PT Bank and Neste Oyj 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 Neste Oyj 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 Neste Oyj, you can compare the effects of market volatilities on PT Bank and Neste Oyj 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 Neste Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Neste Oyj.
Diversification Opportunities for PT Bank and Neste Oyj
Very weak diversification
The 3 months correlation between BYRA and Neste is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Neste Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neste Oyj 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 Neste Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neste Oyj has no effect on the direction of PT Bank i.e., PT Bank and Neste Oyj go up and down completely randomly.
Pair Corralation between PT Bank and Neste Oyj
Assuming the 90 days trading horizon PT Bank Rakyat is expected to generate 1.44 times more return on investment than Neste Oyj. However, PT Bank is 1.44 times more volatile than Neste Oyj. It trades about -0.09 of its potential returns per unit of risk. Neste Oyj is currently generating about -0.35 per unit of risk. If you would invest 23.00 in PT Bank Rakyat on December 4, 2024 and sell it today you would lose (3.00) from holding PT Bank Rakyat or give up 13.04% 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. Neste Oyj
Performance |
Timeline |
PT Bank Rakyat |
Neste Oyj |
PT Bank and Neste Oyj Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Bank and Neste Oyj
The main advantage of trading using opposite PT Bank and Neste Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Neste Oyj 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 Neste Oyj will offset losses from the drop in Neste Oyj's long position.PT Bank vs. TITAN MACHINERY | PT Bank vs. Federal Agricultural Mortgage | PT Bank vs. China Railway Construction | PT Bank vs. Sixt Leasing SE |
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Check out your portfolio center.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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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