Correlation Between PT Bank and Workday

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

Diversification Opportunities for PT Bank and Workday

-0.38

Correlation Coefficient

PT Bank  Workday

Very good diversification

The 3 months correlation between BZG2 and Workday is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and Workday in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workday 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 Workday. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workday has no effect on the direction of PT Bank i.e., PT Bank and Workday go up and down completely randomly.

Pair Corralation between PT Bank and Workday

Assuming the 90 days trading horizon PT Bank Central is expected to generate 2.65 times more return on investment than Workday. However, PT Bank is 2.65 times more volatile than Workday. It trades about -0.02 of its potential returns per unit of risk. Workday is currently generating about -0.15 per unit of risk. If you would invest  59.00  in PT Bank Central on October 11, 2024 and sell it today you would lose (2.00) from holding PT Bank Central or give up 3.39% of portfolio value over 90 days.

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

PT Bank Central  vs.  Workday

PT Bank Central

Risk-Adjusted Performance

0 of 100

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 nearly stable technical and fundamental indicators, PT Bank is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Workday

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Workday are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Workday may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with PT Bank and Workday

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

The idea behind PT Bank Central and Workday 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.