Correlation Between Bank Artos and Smartfren Telecom
Can any of the company-specific risk be diversified away by investing in both Bank Artos and Smartfren Telecom 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 Smartfren Telecom 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 Smartfren Telecom Tbk, you can compare the effects of market volatilities on Bank Artos and Smartfren Telecom 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 Smartfren Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Artos and Smartfren Telecom.
Diversification Opportunities for Bank Artos and Smartfren Telecom
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and Smartfren is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bank Artos Indonesia and Smartfren Telecom Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smartfren Telecom Tbk 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 Smartfren Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smartfren Telecom Tbk has no effect on the direction of Bank Artos i.e., Bank Artos and Smartfren Telecom go up and down completely randomly.
Pair Corralation between Bank Artos and Smartfren Telecom
Assuming the 90 days trading horizon Bank Artos Indonesia is expected to generate 1.23 times more return on investment than Smartfren Telecom. However, Bank Artos is 1.23 times more volatile than Smartfren Telecom Tbk. It trades about -0.09 of its potential returns per unit of risk. Smartfren Telecom Tbk is currently generating about -0.23 per unit of risk. If you would invest 280,000 in Bank Artos Indonesia on September 2, 2024 and sell it today you would lose (16,000) from holding Bank Artos Indonesia or give up 5.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Artos Indonesia vs. Smartfren Telecom Tbk
Performance |
| Timeline |
| Bank Artos Indonesia |
| Smartfren Telecom Tbk |
Bank Artos and Smartfren Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Artos and Smartfren Telecom
The main advantage of trading using opposite Bank Artos and Smartfren Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Artos position performs unexpectedly, Smartfren Telecom 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 Smartfren Telecom will offset losses from the drop in Smartfren Telecom'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 |
| Smartfren Telecom vs. Indosat Tbk | Smartfren Telecom vs. XL Axiata Tbk | Smartfren Telecom vs. Energi Mega Persada | Smartfren Telecom vs. Bakrie Brothers 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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