Correlation Between Bank Capital and Bank Mnc
Can any of the company-specific risk be diversified away by investing in both Bank Capital and Bank Mnc 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 Mnc 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 Mnc Internasional, you can compare the effects of market volatilities on Bank Capital and Bank Mnc 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 Mnc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Capital and Bank Mnc.
Diversification Opportunities for Bank Capital and Bank Mnc
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Bank is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bank Capital Indonesia and Bank Mnc Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mnc Internasional 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 Mnc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mnc Internasional has no effect on the direction of Bank Capital i.e., Bank Capital and Bank Mnc go up and down completely randomly.
Pair Corralation between Bank Capital and Bank Mnc
Assuming the 90 days trading horizon Bank Capital Indonesia is expected to generate 0.28 times more return on investment than Bank Mnc. However, Bank Capital Indonesia is 3.59 times less risky than Bank Mnc. It trades about 0.0 of its potential returns per unit of risk. Bank Mnc Internasional is currently generating about -0.03 per unit of risk. If you would invest 13,100 in Bank Capital Indonesia on November 5, 2024 and sell it today you would earn a total of 0.00 from holding Bank Capital Indonesia or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.57% |
| Values | Daily Returns |
Bank Capital Indonesia vs. Bank Mnc Internasional
Performance |
| Timeline |
| Bank Capital Indonesia |
| Bank Mnc Internasional |
Bank Capital and Bank Mnc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Capital and Bank Mnc
The main advantage of trading using opposite Bank Capital and Bank Mnc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Capital position performs unexpectedly, Bank Mnc 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 Mnc will offset losses from the drop in Bank Mnc's long position.| Bank Capital vs. Bank Mnc Internasional | Bank Capital vs. Bank Bumi Arta | Bank Capital vs. Bank Victoria International | Bank Capital vs. Bank Qnb Indonesia |
| Bank Mnc vs. Bank Capital Indonesia | Bank Mnc vs. Bank Pembangunan Daerah | Bank Mnc vs. Bank Victoria International | Bank Mnc vs. Bank Qnb 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |