Correlation Between Asuransi Dayin and Bank Mayapada

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Can any of the company-specific risk be diversified away by investing in both Asuransi Dayin and Bank Mayapada 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 Mayapada 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 Mayapada Internasional, you can compare the effects of market volatilities on Asuransi Dayin and Bank Mayapada 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 Mayapada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asuransi Dayin and Bank Mayapada.

Diversification Opportunities for Asuransi Dayin and Bank Mayapada

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between Asuransi and Bank is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Asuransi Dayin Mitra and Bank Mayapada Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mayapada Intern 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 Mayapada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mayapada Intern has no effect on the direction of Asuransi Dayin i.e., Asuransi Dayin and Bank Mayapada go up and down completely randomly.

Pair Corralation between Asuransi Dayin and Bank Mayapada

Assuming the 90 days trading horizon Asuransi Dayin Mitra is expected to generate 10.47 times more return on investment than Bank Mayapada. However, Asuransi Dayin is 10.47 times more volatile than Bank Mayapada Internasional. It trades about 0.04 of its potential returns per unit of risk. Bank Mayapada Internasional is currently generating about -0.02 per unit of risk. If you would invest  40,254  in Asuransi Dayin Mitra on August 27, 2024 and sell it today you would earn a total of  9,346  from holding Asuransi Dayin Mitra or generate 23.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.77%
ValuesDaily Returns

Asuransi Dayin Mitra  vs.  Bank Mayapada Internasional

 Performance 
       Timeline  
Asuransi Dayin Mitra 

Risk-Adjusted Performance

1 of 100

 
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Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Asuransi Dayin Mitra are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Asuransi Dayin is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Bank Mayapada Intern 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bank Mayapada Internasional has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Asuransi Dayin and Bank Mayapada Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Asuransi Dayin and Bank Mayapada

The main advantage of trading using opposite Asuransi Dayin and Bank Mayapada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asuransi Dayin position performs unexpectedly, Bank Mayapada 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 Mayapada will offset losses from the drop in Bank Mayapada's long position.
The idea behind Asuransi Dayin Mitra and Bank Mayapada Internasional pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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