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

-0.42

Correlation Coefficient

PT Bank  AerCap Holdings

Very good diversification

The 3 months correlation between BZG2 and AerCap is -0.42. 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 3.04 times more volatile than AerCap Holdings NV. It trades about -0.08 of its total potential returns per unit of risk. AerCap Holdings NV is currently generating about 0.07 per unit of volatility. If you would invest  9,033  in AerCap Holdings NV on December 28, 2024 and sell it today you would earn a total of  543.00  from holding AerCap Holdings NV or generate 6.01% 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 Central  vs.  AerCap Holdings NV

PT Bank Central

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Bank Central has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

AerCap Holdings NV

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AerCap Holdings NV are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AerCap Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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.

The idea behind PT Bank Central and AerCap Holdings NV 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.