Correlation Between Q2M Managementberatu and PT Bank

Can any of the company-specific risk be diversified away by investing in both Q2M Managementberatu 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 Q2M Managementberatu and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Q2M Managementberatung AG and PT Bank Rakyat, you can compare the effects of market volatilities on Q2M Managementberatu 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 Q2M Managementberatu with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Q2M Managementberatu and PT Bank.

Diversification Opportunities for Q2M Managementberatu and PT Bank

0.0

Correlation Coefficient

Q2M Managementberatu  PT Bank

Pay attention - limited upside

The 3 months correlation between Q2M and BYRA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Q2M Managementberatung AG 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 Q2M Managementberatu 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 Q2M Managementberatung AG 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 Q2M Managementberatu i.e., Q2M Managementberatu and PT Bank go up and down completely randomly.

Pair Corralation between Q2M Managementberatu and PT Bank

Assuming the 90 days trading horizon Q2M Managementberatu is expected to generate 4.88 times less return on investment than PT Bank. But when comparing it to its historical volatility, Q2M Managementberatung AG is 6.13 times less risky than PT Bank. It trades about 0.04 of its potential returns per unit of risk. PT Bank Rakyat is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  25.00  in PT Bank Rakyat on March 31, 2024 and sell it today you would earn a total of  3.00  from holding PT Bank Rakyat or generate 12.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Q2M Managementberatung AG  vs.  PT Bank Rakyat

Q2M Managementberatung

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Q2M Managementberatung AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Q2M Managementberatu is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

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 basic indicators, 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 Q2M Managementberatu and PT Bank

The main advantage of trading using opposite Q2M Managementberatu and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Q2M Managementberatu 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 Q2M Managementberatung AG 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..