Correlation Between Asuransi Dayin and Bank Rakyat
Can any of the company-specific risk be diversified away by investing in both Asuransi Dayin 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 Asuransi Dayin and Bank Rakyat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asuransi Dayin Mitra and Bank Rakyat Indonesia, you can compare the effects of market volatilities on Asuransi Dayin 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 Asuransi Dayin with a short position of Bank Rakyat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asuransi Dayin and Bank Rakyat.
Diversification Opportunities for Asuransi Dayin and Bank Rakyat
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asuransi and Bank is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Asuransi Dayin Mitra 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 Asuransi Dayin 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 Asuransi Dayin Mitra 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 Asuransi Dayin i.e., Asuransi Dayin and Bank Rakyat go up and down completely randomly.
Pair Corralation between Asuransi Dayin and Bank Rakyat
Assuming the 90 days trading horizon Asuransi Dayin Mitra is expected to generate 29.75 times more return on investment than Bank Rakyat. However, Asuransi Dayin is 29.75 times more volatile than Bank Rakyat Indonesia. It trades about 0.04 of its potential returns per unit of risk. Bank Rakyat Indonesia is currently generating about 0.01 per unit of risk. If you would invest 40,469 in Asuransi Dayin Mitra on August 27, 2024 and sell it today you would earn a total of 9,131 from holding Asuransi Dayin Mitra or generate 22.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Asuransi Dayin Mitra vs. Bank Rakyat Indonesia
Performance |
| Timeline |
| Asuransi Dayin Mitra |
| Bank Rakyat Indonesia |
Asuransi Dayin and Bank Rakyat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asuransi Dayin and Bank Rakyat
The main advantage of trading using opposite Asuransi Dayin and Bank Rakyat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asuransi Dayin 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.| Asuransi Dayin vs. Asuransi Bintang Tbk | Asuransi Dayin vs. Asuransi Bina Dana | Asuransi Dayin vs. Asuransi Ramayana Tbk | Asuransi Dayin vs. Asuransi Harta Aman |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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