Correlation Between Sycamore Entmt and PT Bank

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

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

Diversification Opportunities for Sycamore Entmt and PT Bank

-0.58

Correlation Coefficient

Sycamore Entmt  PT Bank

Excellent diversification

The 3 months correlation between Sycamore and BKRKF is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sycamore Entmt Grp and PT Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Rakyat and Sycamore Entmt 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 Sycamore Entmt Grp are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Rakyat has no effect on the direction of Sycamore Entmt i.e., Sycamore Entmt and PT Bank go up and down completely randomly.

Pair Corralation between Sycamore Entmt and PT Bank

Given the investment horizon of 90 days Sycamore Entmt is expected to generate 10.49 times less return on investment than PT Bank. In addition to that, Sycamore Entmt is 1.37 times more volatile than PT Bank Rakyat. It trades about 0.0 of its total potential returns per unit of risk. PT Bank Rakyat is currently generating about 0.06 per unit of volatility. If you would invest  28.00  in PT Bank Rakyat on September 12, 2024 and sell it today you would earn a total of  1.00  from holding PT Bank Rakyat or generate 3.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Sycamore Entmt Grp  vs.  PT Bank Rakyat

Sycamore Entmt Grp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sycamore Entmt Grp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical and fundamental indicators, Sycamore Entmt demonstrated solid returns over the last few months and may actually be approaching a breakup point.

PT Bank Rakyat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Bank Rakyat has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, PT Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sycamore Entmt and PT Bank

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

The idea behind Sycamore Entmt Grp and PT Bank Rakyat 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.