Correlation Between Bank Amar and PT Bank
Can any of the company-specific risk be diversified away by investing in both Bank Amar and PT Bank 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 PT Bank 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 PT Bank Bisnis, you can compare the effects of market volatilities on Bank Amar and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Amar and PT Bank.
Diversification Opportunities for Bank Amar and PT Bank
Modest diversification
The 3 months correlation between Bank and BBSI is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bank Amar Indonesia and PT Bank Bisnis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Bisnis 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Bisnis has no effect on the direction of Bank Amar i.e., Bank Amar and PT Bank go up and down completely randomly.
Pair Corralation between Bank Amar and PT Bank
Assuming the 90 days trading horizon Bank Amar Indonesia is expected to under-perform the PT Bank. In addition to that, Bank Amar is 1.06 times more volatile than PT Bank Bisnis. It trades about -0.29 of its total potential returns per unit of risk. PT Bank Bisnis is currently generating about -0.04 per unit of volatility. If you would invest 427,000 in PT Bank Bisnis on September 1, 2024 and sell it today you would lose (7,000) from holding PT Bank Bisnis or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Amar Indonesia vs. PT Bank Bisnis
Performance |
| Timeline |
| Bank Amar Indonesia |
| PT Bank Bisnis |
Bank Amar and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Amar and PT Bank
The main advantage of trading using opposite Bank Amar and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Amar position performs unexpectedly, PT Bank 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 Bank will offset losses from the drop in PT Bank's long position.| Bank Amar vs. Bank Yudha Bhakti | Bank Amar vs. Bk Harda Internasional | Bank Amar vs. Bank Ganesha Tbk | Bank Amar vs. Bank Capital Indonesia |
| PT Bank vs. Bk Harda Internasional | PT Bank vs. Bank Yudha Bhakti | PT Bank vs. Bank Net Indonesia | PT Bank vs. Bank Amar 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |