Correlation Between Nok Airlines and PT Bank

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

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

Diversification Opportunities for Nok Airlines and PT Bank

0.0

Correlation Coefficient

Nok Airlines  PT Bank

Pay attention - limited upside

The 3 months correlation between Nok and BYRA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nok Airlines PCL 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 Nok Airlines 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 Nok Airlines PCL 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 Nok Airlines i.e., Nok Airlines and PT Bank go up and down completely randomly.

Pair Corralation between Nok Airlines and PT Bank

If you would invest  28.00  in PT Bank Rakyat on September 14, 2024 and sell it today you would lose (4.00) from holding PT Bank Rakyat or give up 14.29% of portfolio value over 90 days.

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

Nok Airlines PCL  vs.  PT Bank Rakyat

Nok Airlines PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nok Airlines PCL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Nok Airlines is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

PT Bank Rakyat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Bank Rakyat has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Nok Airlines and PT Bank

The main advantage of trading using opposite Nok Airlines and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nok Airlines 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 Nok Airlines PCL 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.