Correlation Between PT Bank and First Eagle

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

Diversification Opportunities for PT Bank and First Eagle

-0.44

Correlation Coefficient

PT Bank  First Eagle

Very good diversification

The 3 months correlation between PBCRF and First is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and First Eagle Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Alternative 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 First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Alternative has no effect on the direction of PT Bank i.e., PT Bank and First Eagle go up and down completely randomly.

Pair Corralation between PT Bank and First Eagle

Assuming the 90 days horizon PT Bank Central is expected to generate 2.48 times more return on investment than First Eagle. However, PT Bank is 2.48 times more volatile than First Eagle Alternative. It trades about 0.02 of its potential returns per unit of risk. First Eagle Alternative is currently generating about 0.05 per unit of risk. If you would invest  53.00  in PT Bank Central on October 12, 2024 and sell it today you would earn a total of  6.00  from holding PT Bank Central or generate 11.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	7.19%
Values	Daily Returns

PT Bank Central  vs.  First Eagle Alternative

PT Bank Central

Risk-Adjusted Performance

0 of 100

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 latest fragile 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.

First Eagle Alternative

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with PT Bank and First Eagle

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

The idea behind PT Bank Central and First Eagle Alternative 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.