Correlation Between PT Bank and Starfleet Innotech

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

Diversification Opportunities for PT Bank and Starfleet Innotech

-0.37

Correlation Coefficient

PT Bank  Starfleet Innotech

Very good diversification

The 3 months correlation between PBCRF and Starfleet is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and Starfleet Innotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starfleet Innotech 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 Starfleet Innotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starfleet Innotech has no effect on the direction of PT Bank i.e., PT Bank and Starfleet Innotech go up and down completely randomly.

Pair Corralation between PT Bank and Starfleet Innotech

Assuming the 90 days horizon PT Bank Central is expected to under-perform the Starfleet Innotech. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Bank Central is 2.53 times less risky than Starfleet Innotech. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Starfleet Innotech is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.30  in Starfleet Innotech on October 23, 2024 and sell it today you would earn a total of  0.04  from holding Starfleet Innotech or generate 13.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PT Bank Central  vs.  Starfleet Innotech

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 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.

Starfleet Innotech

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Starfleet Innotech are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady forward indicators, Starfleet Innotech displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Bank and Starfleet Innotech

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

The idea behind PT Bank Central and Starfleet Innotech 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.