Correlation Between QURATE RETAIL and PT Bank

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

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

Diversification Opportunities for QURATE RETAIL and PT Bank

-0.6

Correlation Coefficient

QURATE RETAIL  PT Bank

Excellent diversification

The 3 months correlation between QURATE and BYRA is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding QURATE RETAIL INC 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 QURATE RETAIL 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 QURATE RETAIL INC 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 QURATE RETAIL i.e., QURATE RETAIL and PT Bank go up and down completely randomly.

Pair Corralation between QURATE RETAIL and PT Bank

Assuming the 90 days trading horizon QURATE RETAIL INC is expected to generate 4.2 times more return on investment than PT Bank. However, QURATE RETAIL is 4.2 times more volatile than PT Bank Rakyat. It trades about 0.11 of its potential returns per unit of risk. PT Bank Rakyat is currently generating about 0.05 per unit of risk. If you would invest  290.00  in QURATE RETAIL INC on December 30, 2024 and sell it today you would earn a total of  310.00  from holding QURATE RETAIL INC or generate 106.9% return on investment over 90 days.

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

QURATE RETAIL INC  vs.  PT Bank Rakyat

QURATE RETAIL INC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QURATE RETAIL INC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, QURATE RETAIL reported solid returns over the last few months and may actually be approaching a breakup point.

PT Bank Rakyat

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PT Bank Rakyat are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, PT Bank reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with QURATE RETAIL and PT Bank

The main advantage of trading using opposite QURATE RETAIL and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QURATE RETAIL 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 QURATE RETAIL INC 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.

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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.