Correlation Between PT Bank and UNIVERSAL DISPLAY
Can any of the company-specific risk be diversified away by investing in both PT Bank and UNIVERSAL DISPLAY 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 UNIVERSAL DISPLAY 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 UNIVERSAL DISPLAY, you can compare the effects of market volatilities on PT Bank and UNIVERSAL DISPLAY 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 UNIVERSAL DISPLAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and UNIVERSAL DISPLAY.
Diversification Opportunities for PT Bank and UNIVERSAL DISPLAY
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BYRA and UNIVERSAL is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and UNIVERSAL DISPLAY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIVERSAL DISPLAY 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 UNIVERSAL DISPLAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIVERSAL DISPLAY has no effect on the direction of PT Bank i.e., PT Bank and UNIVERSAL DISPLAY go up and down completely randomly.
Pair Corralation between PT Bank and UNIVERSAL DISPLAY
Assuming the 90 days trading horizon PT Bank Rakyat is expected to generate 2.52 times more return on investment than UNIVERSAL DISPLAY. However, PT Bank is 2.52 times more volatile than UNIVERSAL DISPLAY. It trades about 0.03 of its potential returns per unit of risk. UNIVERSAL DISPLAY is currently generating about 0.04 per unit of risk. If you would invest 26.00 in PT Bank Rakyat on October 10, 2024 and sell it today you would lose (2.00) from holding PT Bank Rakyat or give up 7.69% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
PT Bank Rakyat vs. UNIVERSAL DISPLAY
Performance |
Timeline |
PT Bank Rakyat |
UNIVERSAL DISPLAY |
PT Bank and UNIVERSAL DISPLAY Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Bank and UNIVERSAL DISPLAY
The main advantage of trading using opposite PT Bank and UNIVERSAL DISPLAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, UNIVERSAL DISPLAY 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 UNIVERSAL DISPLAY will offset losses from the drop in UNIVERSAL DISPLAY's long position.PT Bank vs. Yanzhou Coal Mining | PT Bank vs. Hanison Construction Holdings | PT Bank vs. De Grey Mining | PT Bank vs. Granite Construction |
UNIVERSAL DISPLAY vs. MOLSON RS BEVERAGE | UNIVERSAL DISPLAY vs. BURLINGTON STORES | UNIVERSAL DISPLAY vs. Cal Maine Foods | UNIVERSAL DISPLAY vs. Performance Food Group |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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