Correlation Between DBS Group and PT Bank

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

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

Diversification Opportunities for DBS Group and PT Bank

0.34

Correlation Coefficient

DBS Group  PT Bank

Weak diversification

The 3 months correlation between DBS and BYRA is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding DBS Group Holdings 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 DBS Group 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 DBS Group Holdings 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 DBS Group i.e., DBS Group and PT Bank go up and down completely randomly.

Pair Corralation between DBS Group and PT Bank

Assuming the 90 days trading horizon DBS Group is expected to generate 2.34 times less return on investment than PT Bank. But when comparing it to its historical volatility, DBS Group Holdings is 6.42 times less risky than PT Bank. It trades about 0.19 of its potential returns per unit of risk. PT Bank Rakyat is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  17.00  in PT Bank Rakyat on April 22, 2025 and sell it today you would earn a total of  3.00  from holding PT Bank Rakyat or generate 17.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

DBS Group Holdings  vs.  PT Bank Rakyat

DBS Group Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DBS Group Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, DBS Group reported solid returns over the last few months and may actually be approaching a breakup point.

PT Bank Rakyat

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PT Bank Rakyat are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PT Bank reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DBS Group and PT Bank

The main advantage of trading using opposite DBS Group and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DBS Group 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 DBS Group Holdings 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.