Correlation Between Bank Rakyat and Bank Ganesha
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Bank Ganesha 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 Bank Ganesha 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 Bank Ganesha Tbk, you can compare the effects of market volatilities on Bank Rakyat and Bank Ganesha 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 Bank Ganesha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Bank Ganesha.
Diversification Opportunities for Bank Rakyat and Bank Ganesha
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Bank is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat Indonesia and Bank Ganesha Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Ganesha Tbk 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 Bank Ganesha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Ganesha Tbk has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Bank Ganesha go up and down completely randomly.
Pair Corralation between Bank Rakyat and Bank Ganesha
Assuming the 90 days trading horizon Bank Rakyat Indonesia is expected to under-perform the Bank Ganesha. But the stock apears to be less risky and, when comparing its historical volatility, Bank Rakyat Indonesia is 1.02 times less risky than Bank Ganesha. The stock trades about -0.04 of its potential returns per unit of risk. The Bank Ganesha Tbk is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 6,600 in Bank Ganesha Tbk on August 29, 2024 and sell it today you would earn a total of 1,700 from holding Bank Ganesha Tbk or generate 25.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat Indonesia vs. Bank Ganesha Tbk
Performance |
| Timeline |
| Bank Rakyat Indonesia |
| Bank Ganesha Tbk |
Bank Rakyat and Bank Ganesha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Bank Ganesha
The main advantage of trading using opposite Bank Rakyat and Bank Ganesha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Bank Ganesha 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 Bank Ganesha will offset losses from the drop in Bank Ganesha'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 |
| Bank Ganesha vs. Bk Harda Internasional | Bank Ganesha vs. Bank Yudha Bhakti | Bank Ganesha vs. Bank Mnc Internasional | Bank Ganesha vs. Bank Capital 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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