Correlation Between PT Bank and AURELIUS Equity
Can any of the company-specific risk be diversified away by investing in both PT Bank and AURELIUS Equity 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 AURELIUS Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Mandiri and AURELIUS Equity Opportunities, you can compare the effects of market volatilities on PT Bank and AURELIUS Equity 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 AURELIUS Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and AURELIUS Equity.
Diversification Opportunities for PT Bank and AURELIUS Equity
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PQ9 and AURELIUS is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and AURELIUS Equity Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AURELIUS Equity Oppo 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 Mandiri are associated (or correlated) with AURELIUS Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AURELIUS Equity Oppo has no effect on the direction of PT Bank i.e., PT Bank and AURELIUS Equity go up and down completely randomly.
Pair Corralation between PT Bank and AURELIUS Equity
Assuming the 90 days horizon PT Bank is expected to generate 14.19 times less return on investment than AURELIUS Equity. But when comparing it to its historical volatility, PT Bank Mandiri is 5.82 times less risky than AURELIUS Equity. It trades about 0.02 of its potential returns per unit of risk. AURELIUS Equity Opportunities is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,154 in AURELIUS Equity Opportunities on October 6, 2024 and sell it today you would earn a total of 7,006 from holding AURELIUS Equity Opportunities or generate 607.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PT Bank Mandiri vs. AURELIUS Equity Opportunities
Performance |
Timeline |
PT Bank Mandiri |
AURELIUS Equity Oppo |
PT Bank and AURELIUS Equity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Bank and AURELIUS Equity
The main advantage of trading using opposite PT Bank and AURELIUS Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, AURELIUS Equity 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 AURELIUS Equity will offset losses from the drop in AURELIUS Equity's long position.PT Bank vs. Delta Electronics Public | PT Bank vs. Methode Electronics | PT Bank vs. Alfa Financial Software | PT Bank vs. Align Technology |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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