Correlation Between PT Bank and FAIR ISAAC

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

Diversification Opportunities for PT Bank and FAIR ISAAC

-0.41

Correlation Coefficient

PT Bank  FAIR ISAAC

Very good diversification

The 3 months correlation between BYRA and FAIR is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and FAIR ISAAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAIR ISAAC 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 FAIR ISAAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAIR ISAAC has no effect on the direction of PT Bank i.e., PT Bank and FAIR ISAAC go up and down completely randomly.

Pair Corralation between PT Bank and FAIR ISAAC

Assuming the 90 days trading horizon PT Bank Rakyat is expected to under-perform the FAIR ISAAC. In addition to that, PT Bank is 2.29 times more volatile than FAIR ISAAC. It trades about -0.01 of its total potential returns per unit of risk. FAIR ISAAC is currently generating about 0.08 per unit of volatility. If you would invest  177,250  in FAIR ISAAC on October 8, 2024 and sell it today you would earn a total of  16,350  from holding FAIR ISAAC or generate 9.22% return on investment over 90 days.

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

PT Bank Rakyat  vs.  FAIR ISAAC

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. In spite of comparatively stable basic indicators, PT Bank is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

FAIR ISAAC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FAIR ISAAC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, FAIR ISAAC may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with PT Bank and FAIR ISAAC

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

The idea behind PT Bank Rakyat and FAIR ISAAC 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.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.