Correlation Between PT Bank and Vaporbrands Intl

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

Diversification Opportunities for PT Bank and Vaporbrands Intl

-0.28

Correlation Coefficient

PT Bank  Vaporbrands Intl

Very good diversification

The 3 months correlation between PBCRF and Vaporbrands is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and Vaporbrands Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaporbrands Intl 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 Vaporbrands Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaporbrands Intl has no effect on the direction of PT Bank i.e., PT Bank and Vaporbrands Intl go up and down completely randomly.

Pair Corralation between PT Bank and Vaporbrands Intl

Assuming the 90 days horizon PT Bank Central is expected to under-perform the Vaporbrands Intl. But the pink sheet apears to be less risky and, when comparing its historical volatility, PT Bank Central is 2.22 times less risky than Vaporbrands Intl. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Vaporbrands Intl is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.56  in Vaporbrands Intl on October 25, 2024 and sell it today you would earn a total of  0.09  from holding Vaporbrands Intl or generate 16.07% 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.  Vaporbrands Intl

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.

Vaporbrands Intl

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vaporbrands Intl are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Vaporbrands Intl reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Bank and Vaporbrands Intl

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

The idea behind PT Bank Central and Vaporbrands Intl 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.