Correlation Between PT Bank and Semperit Aktiengesellscha

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

Diversification Opportunities for PT Bank and Semperit Aktiengesellscha

-0.61

Correlation Coefficient

PT Bank  Semperit Aktiengesellscha

Excellent diversification

The 3 months correlation between PQ9 and Semperit is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Mandiri and Semperit Aktiengesellschaft Ho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semperit Aktiengesellscha 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 Semperit Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semperit Aktiengesellscha has no effect on the direction of PT Bank i.e., PT Bank and Semperit Aktiengesellscha go up and down completely randomly.

Pair Corralation between PT Bank and Semperit Aktiengesellscha

Assuming the 90 days horizon PT Bank Mandiri is expected to under-perform the Semperit Aktiengesellscha. In addition to that, PT Bank is 5.29 times more volatile than Semperit Aktiengesellschaft Holding. It trades about -0.14 of its total potential returns per unit of risk. Semperit Aktiengesellschaft Holding is currently generating about 0.35 per unit of volatility. If you would invest  1,162  in Semperit Aktiengesellschaft Holding on October 10, 2024 and sell it today you would earn a total of  66.00  from holding Semperit Aktiengesellschaft Holding or generate 5.68% 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.  Semperit Aktiengesellschaft Ho

PT Bank Mandiri

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Bank Mandiri has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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.

Semperit Aktiengesellscha

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Semperit Aktiengesellschaft Holding are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Semperit Aktiengesellscha may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with PT Bank and Semperit Aktiengesellscha

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

The idea behind PT Bank Mandiri and Semperit Aktiengesellschaft Holding 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.