Correlation Between Bank Rakyat and Bk Harda
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Bk Harda 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 Bank Rakyat and Bk Harda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat Indonesia and Bk Harda Internasional, you can compare the effects of market volatilities on Bank Rakyat and Bk Harda 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 Bank Rakyat with a short position of Bk Harda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Bk Harda.
Diversification Opportunities for Bank Rakyat and Bk Harda
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and BBHI is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat Indonesia and Bk Harda Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bk Harda Internasional and Bank Rakyat 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 Bank Rakyat Indonesia are associated (or correlated) with Bk Harda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bk Harda Internasional has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Bk Harda go up and down completely randomly.
Pair Corralation between Bank Rakyat and Bk Harda
Assuming the 90 days trading horizon Bank Rakyat Indonesia is expected to generate 1.23 times more return on investment than Bk Harda. However, Bank Rakyat is 1.23 times more volatile than Bk Harda Internasional. It trades about -0.22 of its potential returns per unit of risk. Bk Harda Internasional is currently generating about -0.3 per unit of risk. If you would invest 19,900 in Bank Rakyat Indonesia on December 24, 2024 and sell it today you would lose (2,500) from holding Bank Rakyat Indonesia or give up 12.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat Indonesia vs. Bk Harda Internasional
Performance |
| Timeline |
| Bank Rakyat Indonesia |
| Bk Harda Internasional |
Bank Rakyat and Bk Harda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Bk Harda
The main advantage of trading using opposite Bank Rakyat and Bk Harda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Bk Harda 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 Bk Harda will offset losses from the drop in Bk Harda's long position.| Bank Rakyat vs. Bank Bukopin Tbk | Bank Rakyat vs. Bank BRISyariah Tbk | Bank Rakyat vs. Bank Tabungan Negara | Bank Rakyat vs. Bank Artos Indonesia |
| Bk Harda vs. Bank Artos Indonesia | Bk Harda vs. Bank Yudha Bhakti | Bk Harda vs. Bank Ganesha Tbk | Bk Harda vs. Bank Rakyat Indonesia |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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