Correlation Between PT Bank and Total Telcom
Can any of the company-specific risk be diversified away by investing in both PT Bank and Total Telcom 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 Total Telcom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Rakyat and Total Telcom, you can compare the effects of market volatilities on PT Bank and Total Telcom 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 Total Telcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Total Telcom.
Diversification Opportunities for PT Bank and Total Telcom
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BKRKF and Total is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Rakyat and Total Telcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Telcom 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 Rakyat are associated (or correlated) with Total Telcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Telcom has no effect on the direction of PT Bank i.e., PT Bank and Total Telcom go up and down completely randomly.
Pair Corralation between PT Bank and Total Telcom
Assuming the 90 days horizon PT Bank Rakyat is expected to generate 2.92 times more return on investment than Total Telcom. However, PT Bank is 2.92 times more volatile than Total Telcom. It trades about 0.04 of its potential returns per unit of risk. Total Telcom is currently generating about -0.03 per unit of risk. If you would invest 26.00 in PT Bank Rakyat on August 30, 2025 and sell it today you would earn a total of 1.00 from holding PT Bank Rakyat or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 71.83% |
| Values | Daily Returns |
PT Bank Rakyat vs. Total Telcom
Performance |
| Timeline |
| PT Bank Rakyat |
| Total Telcom |
PT Bank and Total Telcom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Total Telcom
The main advantage of trading using opposite PT Bank and Total Telcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Total Telcom 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 Total Telcom will offset losses from the drop in Total Telcom's long position.| PT Bank vs. HDFC Bank Limited | PT Bank vs. China Merchants Bank | PT Bank vs. Fifth Third Bancorp | PT Bank vs. Banco Bradesco SA |
| Total Telcom vs. Gex Management | Total Telcom vs. National Storm Management | Total Telcom vs. MGIC Investment Corp | Total Telcom vs. SM Investments |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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