Correlation Between PT Bank and Swire Properties

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

By analyzing existing cross correlation between PT Bank Central and Swire Properties Limited, you can compare the effects of market volatilities on PT Bank and Swire Properties 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 Swire Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Swire Properties.

Diversification Opportunities for PT Bank and Swire Properties

-0.34

Correlation Coefficient

PT Bank  Swire Properties

Very good diversification

The 3 months correlation between BZG2 and Swire is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Central and Swire Properties Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swire Properties 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 Central are associated (or correlated) with Swire Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swire Properties has no effect on the direction of PT Bank i.e., PT Bank and Swire Properties go up and down completely randomly.

Pair Corralation between PT Bank and Swire Properties

Assuming the 90 days trading horizon PT Bank is expected to generate 2.22 times less return on investment than Swire Properties. In addition to that, PT Bank is 3.02 times more volatile than Swire Properties Limited. It trades about 0.02 of its total potential returns per unit of risk. Swire Properties Limited is currently generating about 0.15 per unit of volatility. If you would invest  181.00  in Swire Properties Limited on April 23, 2025 and sell it today you would earn a total of  35.00  from holding Swire Properties Limited or generate 19.34% return on investment over 90 days.

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

PT Bank Central  vs.  Swire Properties Limited

PT Bank Central

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Bank Central are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, PT Bank may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Swire Properties

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Swire Properties Limited are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Swire Properties reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Bank and Swire Properties

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

The idea behind PT Bank Central and Swire Properties Limited 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.