Correlation Between PT Bank and CardioComm Solutions

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

Diversification Opportunities for PT Bank and CardioComm Solutions

0.0

Correlation Coefficient

PT Bank  CardioComm Solutions

Pay attention - limited upside

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

Pair Corralation between PT Bank and CardioComm Solutions

If you would invest  56.00  in PT Bank Central on December 27, 2024 and sell it today you would lose (5.00) from holding PT Bank Central or give up 8.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PT Bank Central  vs.  CardioComm Solutions

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.

CardioComm Solutions

Risk-Adjusted Performance

Very Weak

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

Pair Trading with PT Bank and CardioComm Solutions

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

The idea behind PT Bank Central and CardioComm Solutions 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.