Correlation Between Sumber Alfaria and Bank Central
Can any of the company-specific risk be diversified away by investing in both Sumber Alfaria and Bank Central 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 Sumber Alfaria and Bank Central into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumber Alfaria Trijaya and Bank Central Asia, you can compare the effects of market volatilities on Sumber Alfaria and Bank Central 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 Sumber Alfaria with a short position of Bank Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Alfaria and Bank Central.
Diversification Opportunities for Sumber Alfaria and Bank Central
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sumber and Bank is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Alfaria Trijaya and Bank Central Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Central Asia and Sumber Alfaria 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 Sumber Alfaria Trijaya are associated (or correlated) with Bank Central. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Central Asia has no effect on the direction of Sumber Alfaria i.e., Sumber Alfaria and Bank Central go up and down completely randomly.
Pair Corralation between Sumber Alfaria and Bank Central
Assuming the 90 days trading horizon Sumber Alfaria Trijaya is expected to under-perform the Bank Central. In addition to that, Sumber Alfaria is 1.95 times more volatile than Bank Central Asia. It trades about -0.41 of its total potential returns per unit of risk. Bank Central Asia is currently generating about -0.28 per unit of volatility. If you would invest 1,059,715 in Bank Central Asia on August 24, 2024 and sell it today you would lose (74,715) from holding Bank Central Asia or give up 7.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sumber Alfaria Trijaya vs. Bank Central Asia
Performance |
| Timeline |
| Sumber Alfaria Trijaya |
| Bank Central Asia |
Sumber Alfaria and Bank Central Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumber Alfaria and Bank Central
The main advantage of trading using opposite Sumber Alfaria and Bank Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Alfaria position performs unexpectedly, Bank Central 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 Central will offset losses from the drop in Bank Central's long position.| Sumber Alfaria vs. Elang Mahkota Teknologi | Sumber Alfaria vs. Ace Hardware Indonesia | Sumber Alfaria vs. BFI Finance Indonesia | Sumber Alfaria vs. Tower Bersama Infrastructure |
| Bank Central vs. Bank Rakyat Indonesia | Bank Central vs. Bank Mandiri Persero | Bank Central vs. Bank Negara Indonesia | Bank Central vs. Astra International Tbk |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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