Correlation Between Bank Amar and Agro Yasa
Can any of the company-specific risk be diversified away by investing in both Bank Amar and Agro Yasa 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 Amar and Agro Yasa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Amar Indonesia and Agro Yasa Lestari, you can compare the effects of market volatilities on Bank Amar and Agro Yasa 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 Amar with a short position of Agro Yasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Amar and Agro Yasa.
Diversification Opportunities for Bank Amar and Agro Yasa
Significant diversification
The 3 months correlation between Bank and Agro is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bank Amar Indonesia and Agro Yasa Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agro Yasa Lestari and Bank Amar 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 Amar Indonesia are associated (or correlated) with Agro Yasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agro Yasa Lestari has no effect on the direction of Bank Amar i.e., Bank Amar and Agro Yasa go up and down completely randomly.
Pair Corralation between Bank Amar and Agro Yasa
Assuming the 90 days trading horizon Bank Amar Indonesia is expected to generate 0.22 times more return on investment than Agro Yasa. However, Bank Amar Indonesia is 4.64 times less risky than Agro Yasa. It trades about -0.37 of its potential returns per unit of risk. Agro Yasa Lestari is currently generating about -0.22 per unit of risk. If you would invest 19,100 in Bank Amar Indonesia on November 30, 2024 and sell it today you would lose (3,200) from holding Bank Amar Indonesia or give up 16.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Amar Indonesia vs. Agro Yasa Lestari
Performance |
| Timeline |
| Bank Amar Indonesia |
| Agro Yasa Lestari |
Bank Amar and Agro Yasa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Amar and Agro Yasa
The main advantage of trading using opposite Bank Amar and Agro Yasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Amar position performs unexpectedly, Agro Yasa 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 Agro Yasa will offset losses from the drop in Agro Yasa's long position.| Bank Amar vs. Bank Yudha Bhakti | Bank Amar vs. Bk Harda Internasional | Bank Amar vs. Bank Capital Indonesia | Bank Amar vs. Bank Agris Tbk |
| Agro Yasa vs. Sinergi Inti Plastindo | Agro Yasa vs. Bank Amar Indonesia | Agro Yasa vs. Andalan Sakti Primaindo | Agro Yasa vs. Era Mandiri Cemerlang |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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