Correlation Between PT Bank and Clearfield

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

Diversification Opportunities for PT Bank and Clearfield

0.53

Correlation Coefficient

PT Bank  Clearfield

Very weak diversification

The 3 months correlation between PBCRF and Clearfield is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and Clearfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearfield 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 Clearfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearfield has no effect on the direction of PT Bank i.e., PT Bank and Clearfield go up and down completely randomly.

Pair Corralation between PT Bank and Clearfield

Assuming the 90 days horizon PT Bank Central is expected to under-perform the Clearfield. In addition to that, PT Bank is 1.72 times more volatile than Clearfield. It trades about -0.01 of its total potential returns per unit of risk. Clearfield is currently generating about -0.01 per unit of volatility. If you would invest  3,123  in Clearfield on December 30, 2024 and sell it today you would lose (130.00) from holding Clearfield or give up 4.16% of portfolio value over 90 days.

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

PT Bank Central  vs.  Clearfield

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

Clearfield

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clearfield has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Clearfield is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with PT Bank and Clearfield

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

The idea behind PT Bank Central and Clearfield 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..