Correlation Between Bank Rakyat and PT Soho
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and PT Soho 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 PT Soho 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 PT Soho Global, you can compare the effects of market volatilities on Bank Rakyat and PT Soho 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 PT Soho. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and PT Soho.
Diversification Opportunities for Bank Rakyat and PT Soho
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and SOHO is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat Indonesia and PT Soho Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Soho Global 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 PT Soho. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Soho Global has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and PT Soho go up and down completely randomly.
Pair Corralation between Bank Rakyat and PT Soho
Assuming the 90 days trading horizon Bank Rakyat Indonesia is expected to under-perform the PT Soho. In addition to that, Bank Rakyat is 3.7 times more volatile than PT Soho Global. It trades about -0.2 of its total potential returns per unit of risk. PT Soho Global is currently generating about -0.05 per unit of volatility. If you would invest 69,500 in PT Soho Global on August 31, 2024 and sell it today you would lose (500.00) from holding PT Soho Global or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat Indonesia vs. PT Soho Global
Performance |
| Timeline |
| Bank Rakyat Indonesia |
| PT Soho Global |
Bank Rakyat and PT Soho Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and PT Soho
The main advantage of trading using opposite Bank Rakyat and PT Soho positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, PT Soho 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 Soho will offset losses from the drop in PT Soho'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 |
| PT Soho vs. Phapros Tbk PT | PT Soho vs. Prodia Widyahusada Tbk | PT Soho vs. Sarana Meditama Metropolitan | PT Soho vs. Metro Healthcare 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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