Correlation Between PT Bank and Liquid Avatar

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

Diversification Opportunities for PT Bank and Liquid Avatar

PBCRFLiquidDiversified AwayPBCRFLiquidDiversified Away100%
0.76
  Correlation Coefficient

Poor diversification

The 3 months correlation between PBCRF and Liquid is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and Liquid Avatar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liquid Avatar Techno 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 Liquid Avatar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liquid Avatar Techno has no effect on the direction of PT Bank i.e., PT Bank and Liquid Avatar go up and down completely randomly.

Pair Corralation between PT Bank and Liquid Avatar

Assuming the 90 days horizon PT Bank Central is expected to generate 0.3 times more return on investment than Liquid Avatar. However, PT Bank Central is 3.35 times less risky than Liquid Avatar. It trades about -0.04 of its potential returns per unit of risk. Liquid Avatar Technologies is currently generating about -0.13 per unit of risk. If you would invest  68.00  in PT Bank Central on October 12, 2024 and sell it today you would lose (9.00) from holding PT Bank Central or give up 13.24% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.36%
ValuesDaily Returns

PT Bank Central  vs.  Liquid Avatar Technologies

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -10-50510
JavaScript chart by amCharts 3.21.15PBCRF LQAVF
       Timeline  
PT Bank Central 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.60.650.7
Liquid Avatar Techno 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Liquid Avatar Technologies 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 February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan

PT Bank and Liquid Avatar Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.04-4.52-3.01-1.490.01.482.974.455.94 0.0050.0100.0150.0200.025
JavaScript chart by amCharts 3.21.15PBCRF LQAVF
       Returns  

Pair Trading with PT Bank and Liquid Avatar

The main advantage of trading using opposite PT Bank and Liquid Avatar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Liquid Avatar 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 Liquid Avatar will offset losses from the drop in Liquid Avatar's long position.
The idea behind PT Bank Central and Liquid Avatar Technologies 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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