Correlation Between Bank Net and Cahayaputra Asa
Can any of the company-specific risk be diversified away by investing in both Bank Net and Cahayaputra Asa 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 Net and Cahayaputra Asa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Net Indonesia and Cahayaputra Asa Keramik, you can compare the effects of market volatilities on Bank Net and Cahayaputra Asa 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 Net with a short position of Cahayaputra Asa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Net and Cahayaputra Asa.
Diversification Opportunities for Bank Net and Cahayaputra Asa
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Cahayaputra is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bank Net Indonesia and Cahayaputra Asa Keramik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cahayaputra Asa Keramik and Bank Net 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 Net Indonesia are associated (or correlated) with Cahayaputra Asa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cahayaputra Asa Keramik has no effect on the direction of Bank Net i.e., Bank Net and Cahayaputra Asa go up and down completely randomly.
Pair Corralation between Bank Net and Cahayaputra Asa
Assuming the 90 days trading horizon Bank Net Indonesia is expected to under-perform the Cahayaputra Asa. But the stock apears to be less risky and, when comparing its historical volatility, Bank Net Indonesia is 1.38 times less risky than Cahayaputra Asa. The stock trades about -0.18 of its potential returns per unit of risk. The Cahayaputra Asa Keramik is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 15,200 in Cahayaputra Asa Keramik on August 30, 2024 and sell it today you would lose (300.00) from holding Cahayaputra Asa Keramik or give up 1.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Net Indonesia vs. Cahayaputra Asa Keramik
Performance |
| Timeline |
| Bank Net Indonesia |
| Cahayaputra Asa Keramik |
Bank Net and Cahayaputra Asa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Net and Cahayaputra Asa
The main advantage of trading using opposite Bank Net and Cahayaputra Asa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Net position performs unexpectedly, Cahayaputra Asa 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 Cahayaputra Asa will offset losses from the drop in Cahayaputra Asa's long position.| Bank Net vs. Bank Artos Indonesia | Bank Net vs. Bank Yudha Bhakti | Bank Net vs. Bk Harda Internasional | Bank Net vs. Bank Rakyat Indonesia |
| Cahayaputra Asa vs. PT Indonesia Kendaraan | Cahayaputra Asa vs. Wijaya Karya Bangunan | Cahayaputra Asa vs. Buyung Poetra Sembada | Cahayaputra Asa vs. J Resources Asia |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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