Correlation Between First Physicians and PT Bank

Can any of the company-specific risk be diversified away by investing in both First Physicians and PT Bank 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 First Physicians and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Physicians Capital and PT Bank Rakyat, you can compare the effects of market volatilities on First Physicians and PT Bank 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 First Physicians with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Physicians and PT Bank.

Diversification Opportunities for First Physicians and PT Bank

0.0

Correlation Coefficient

First Physicians  PT Bank

Pay attention - limited upside

The 3 months correlation between First and BKRKF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Physicians Capital and PT Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Rakyat and First Physicians 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 First Physicians Capital are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Rakyat has no effect on the direction of First Physicians i.e., First Physicians and PT Bank go up and down completely randomly.

Pair Corralation between First Physicians and PT Bank

If you would invest  23.00  in PT Bank Rakyat on December 27, 2024 and sell it today you would earn a total of  0.00  from holding PT Bank Rakyat or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	88.89%
Values	Daily Returns

First Physicians Capital  vs.  PT Bank Rakyat

First Physicians Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days First Physicians Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, First Physicians is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

PT Bank Rakyat

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Bank Rakyat are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, PT Bank reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with First Physicians and PT Bank

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

The idea behind First Physicians Capital and PT Bank Rakyat 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.