Correlation Between PT Bank and BC Technology

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

Diversification Opportunities for PT Bank and BC Technology

0.15

Correlation Coefficient

PT Bank  BC Technology

Average diversification

The 3 months correlation between PBCRF and BCTCF is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and BC Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BC Technology Group 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 BC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BC Technology Group has no effect on the direction of PT Bank i.e., PT Bank and BC Technology go up and down completely randomly.

Pair Corralation between PT Bank and BC Technology

Assuming the 90 days horizon PT Bank Central is expected to under-perform the BC Technology. In addition to that, PT Bank is 1.41 times more volatile than BC Technology Group. It trades about -0.04 of its total potential returns per unit of risk. BC Technology Group is currently generating about -0.01 per unit of volatility. If you would invest  107.00  in BC Technology Group on December 21, 2024 and sell it today you would lose (7.00) from holding BC Technology Group or give up 6.54% of portfolio value over 90 days.

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

PT Bank Central  vs.  BC Technology Group

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 weak performance in the last few months, the Stock's basic 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.

BC Technology Group

Risk-Adjusted Performance

Very Weak

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

Pair Trading with PT Bank and BC Technology

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

The idea behind PT Bank Central and BC Technology Group 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.