Correlation Between Bank Capital and Bank Amar
Can any of the company-specific risk be diversified away by investing in both Bank Capital and Bank Amar 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 Capital and Bank Amar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Capital Indonesia and Bank Amar Indonesia, you can compare the effects of market volatilities on Bank Capital and Bank Amar 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 Capital with a short position of Bank Amar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Capital and Bank Amar.
Diversification Opportunities for Bank Capital and Bank Amar
-0.06 | Correlation Coefficient |
Good 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 Capital Indonesia and Bank Amar Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Amar Indonesia and Bank Capital 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 Capital Indonesia are associated (or correlated) with Bank Amar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Amar Indonesia has no effect on the direction of Bank Capital i.e., Bank Capital and Bank Amar go up and down completely randomly.
Pair Corralation between Bank Capital and Bank Amar
Assuming the 90 days trading horizon Bank Capital Indonesia is expected to generate 0.7 times more return on investment than Bank Amar. However, Bank Capital Indonesia is 1.43 times less risky than Bank Amar. It trades about -0.06 of its potential returns per unit of risk. Bank Amar Indonesia is currently generating about -0.23 per unit of risk. If you would invest 13,200 in Bank Capital Indonesia on August 31, 2024 and sell it today you would lose (200.00) from holding Bank Capital Indonesia or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Capital Indonesia vs. Bank Amar Indonesia
Performance |
| Timeline |
| Bank Capital Indonesia |
| Bank Amar Indonesia |
Bank Capital and Bank Amar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Capital and Bank Amar
The main advantage of trading using opposite Bank Capital and Bank Amar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Capital position performs unexpectedly, Bank Amar 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 Amar will offset losses from the drop in Bank Amar's long position.| Bank Capital vs. Bank BRISyariah Tbk | Bank Capital vs. Ace Hardware Indonesia | Bank Capital vs. Merdeka Copper Gold | Bank Capital vs. Mitra Pinasthika Mustika |
| Bank Amar vs. Bank Yudha Bhakti | Bank Amar vs. Bk Harda Internasional | Bank Amar vs. Bank Ganesha Tbk | Bank Amar vs. Bank Capital 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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