Correlation Between Bank Negara and Polarityte

Can any of the company-specific risk be diversified away by investing in both Bank Negara and Polarityte 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 Bank Negara and Polarityte into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bank Negara Indonesia and Polarityte, you can compare the effects of market volatilities on Bank Negara and Polarityte 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 Bank Negara with a short position of Polarityte. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Polarityte.

Diversification Opportunities for Bank Negara and Polarityte

0.0

Correlation Coefficient

Bank Negara  Polarityte

Pay attention - limited upside

The 3 months correlation between Bank and Polarityte is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Polarityte in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polarityte and Bank Negara 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 Bank Negara Indonesia are associated (or correlated) with Polarityte. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polarityte has no effect on the direction of Bank Negara i.e., Bank Negara and Polarityte go up and down completely randomly.

Pair Corralation between Bank Negara and Polarityte

If you would invest  7.50  in Polarityte on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Polarityte or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Bank Negara Indonesia  vs.  Polarityte

Bank Negara Indonesia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank Negara Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Polarityte

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polarityte has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Polarityte is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bank Negara and Polarityte

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

The idea behind Bank Negara Indonesia and Polarityte 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.