Correlation Between PT Bank and GOLD ROAD

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

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

Diversification Opportunities for PT Bank and GOLD ROAD

0.82

Correlation Coefficient

PT Bank  GOLD ROAD

Very poor diversification

The 3 months correlation between NKX and GOLD is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank CIMB and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES 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 CIMB are associated (or correlated) with GOLD ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD ROAD RES has no effect on the direction of PT Bank i.e., PT Bank and GOLD ROAD go up and down completely randomly.

Pair Corralation between PT Bank and GOLD ROAD

If you would invest  185.00  in GOLD ROAD RES on March 22, 2025 and sell it today you would earn a total of  3.00  from holding GOLD ROAD RES or generate 1.62% return on investment over 90 days.

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

PT Bank CIMB  vs.  GOLD ROAD RES

PT Bank CIMB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PT Bank CIMB are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, PT Bank unveiled solid returns over the last few months and may actually be approaching a breakup point.

GOLD ROAD RES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GOLD ROAD RES are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, GOLD ROAD exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Bank and GOLD ROAD

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

The idea behind PT Bank CIMB and GOLD ROAD RES 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.