Correlation Between PT Bank and Konica Minolta

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

Diversification Opportunities for PT Bank and Konica Minolta

-0.45

Correlation Coefficient

PT Bank  Konica Minolta

Very good diversification

The 3 months correlation between PBCRF and Konica is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and Konica Minolta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konica Minolta 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 Konica Minolta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konica Minolta has no effect on the direction of PT Bank i.e., PT Bank and Konica Minolta go up and down completely randomly.

Pair Corralation between PT Bank and Konica Minolta

Assuming the 90 days horizon PT Bank is expected to generate 1.15 times less return on investment than Konica Minolta. In addition to that, PT Bank is 1.12 times more volatile than Konica Minolta. It trades about 0.03 of its total potential returns per unit of risk. Konica Minolta is currently generating about 0.04 per unit of volatility. If you would invest  301.00  in Konica Minolta on September 18, 2024 and sell it today you would earn a total of  105.00  from holding Konica Minolta or generate 34.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	70.64%
Values	Daily Returns

PT Bank Central  vs.  Konica Minolta

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 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.

Konica Minolta

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Konica Minolta are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Konica Minolta reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Bank and Konica Minolta

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

The idea behind PT Bank Central and Konica Minolta 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 Anywhere module to track or share privately all of your investments from the convenience of any device.