Correlation Between PT Bank and Rubicon Technologies

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

Diversification Opportunities for PT Bank and Rubicon Technologies

0.68

Correlation Coefficient

PT Bank  Rubicon Technologies

Poor diversification

The 3 months correlation between PBCRF and Rubicon is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and Rubicon Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rubicon Technologies 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 Rubicon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rubicon Technologies has no effect on the direction of PT Bank i.e., PT Bank and Rubicon Technologies go up and down completely randomly.

Pair Corralation between PT Bank and Rubicon Technologies

Assuming the 90 days horizon PT Bank Central is expected to generate 0.34 times more return on investment than Rubicon Technologies. However, PT Bank Central is 2.96 times less risky than Rubicon Technologies. It trades about 0.02 of its potential returns per unit of risk. Rubicon Technologies is currently generating about -0.08 per unit of risk. If you would invest  59.00  in PT Bank Central on September 28, 2024 and sell it today you would lose (3.00) from holding PT Bank Central or give up 5.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	73.07%
Values	Daily Returns

PT Bank Central  vs.  Rubicon Technologies

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 unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Rubicon Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rubicon Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Rubicon Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with PT Bank and Rubicon Technologies

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

The idea behind PT Bank Central and Rubicon 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.