Correlation Between PT Bank and AerCap Holdings
Can any of the company-specific risk be diversified away by investing in both PT Bank and AerCap Holdings 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 AerCap Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Central and AerCap Holdings NV, you can compare the effects of market volatilities on PT Bank and AerCap Holdings 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 AerCap Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and AerCap Holdings.
Diversification Opportunities for PT Bank and AerCap Holdings
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BZG2 and AerCap is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and AerCap Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerCap Holdings NV 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 Central are associated (or correlated) with AerCap Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerCap Holdings NV has no effect on the direction of PT Bank i.e., PT Bank and AerCap Holdings go up and down completely randomly.
Pair Corralation between PT Bank and AerCap Holdings
Assuming the 90 days trading horizon PT Bank Central is expected to under-perform the AerCap Holdings. In addition to that, PT Bank is 3.53 times more volatile than AerCap Holdings NV. It trades about -0.03 of its total potential returns per unit of risk. AerCap Holdings NV is currently generating about 0.08 per unit of volatility. If you would invest 9,352 in AerCap Holdings NV on December 4, 2024 and sell it today you would earn a total of 546.00 from holding AerCap Holdings NV or generate 5.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PT Bank Central vs. AerCap Holdings NV
Performance |
Timeline |
PT Bank Central |
AerCap Holdings NV |
PT Bank and AerCap Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Bank and AerCap Holdings
The main advantage of trading using opposite PT Bank and AerCap Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, AerCap Holdings 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 AerCap Holdings will offset losses from the drop in AerCap Holdings' long position.PT Bank vs. TOMBADOR IRON LTD | PT Bank vs. GRIFFIN MINING LTD | PT Bank vs. Mount Gibson Iron | PT Bank vs. COSMOSTEEL HLDGS |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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