Correlation Between Bank Artos and Bank Rakyat
Can any of the company-specific risk be diversified away by investing in both Bank Artos and Bank Rakyat 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 Artos and Bank Rakyat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Artos Indonesia and Bank Rakyat Indonesia, you can compare the effects of market volatilities on Bank Artos and Bank Rakyat 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 Artos with a short position of Bank Rakyat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Artos and Bank Rakyat.
Diversification Opportunities for Bank Artos and Bank Rakyat
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bank and Bank is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Bank Artos Indonesia and Bank Rakyat Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Rakyat Indonesia and Bank Artos 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 Artos Indonesia are associated (or correlated) with Bank Rakyat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Rakyat Indonesia has no effect on the direction of Bank Artos i.e., Bank Artos and Bank Rakyat go up and down completely randomly.
Pair Corralation between Bank Artos and Bank Rakyat
Assuming the 90 days trading horizon Bank Artos Indonesia is expected to generate 1.38 times more return on investment than Bank Rakyat. However, Bank Artos is 1.38 times more volatile than Bank Rakyat Indonesia. It trades about 0.01 of its potential returns per unit of risk. Bank Rakyat Indonesia is currently generating about -0.04 per unit of risk. If you would invest 287,000 in Bank Artos Indonesia on November 2, 2024 and sell it today you would lose (61,000) from holding Bank Artos Indonesia or give up 21.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Artos Indonesia vs. Bank Rakyat Indonesia
Performance |
| Timeline |
| Bank Artos Indonesia |
| Bank Rakyat Indonesia |
Bank Artos and Bank Rakyat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Artos and Bank Rakyat
The main advantage of trading using opposite Bank Artos and Bank Rakyat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Artos position performs unexpectedly, Bank Rakyat 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 Rakyat will offset losses from the drop in Bank Rakyat's long position.| Bank Artos vs. Elang Mahkota Teknologi | Bank Artos vs. Bank Yudha Bhakti | Bank Artos vs. Bk Harda Internasional | Bank Artos vs. PT Bukalapak |
| Bank Rakyat vs. Bank Bukopin Tbk | Bank Rakyat vs. Bank BRISyariah Tbk | Bank Rakyat vs. Bank Tabungan Negara | Bank Rakyat vs. Bank Artos 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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