Correlation Between Bank Net and Indointernet Tbk
Can any of the company-specific risk be diversified away by investing in both Bank Net and Indointernet Tbk 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 Indointernet Tbk 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 Indointernet Tbk PT, you can compare the effects of market volatilities on Bank Net and Indointernet Tbk 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 Indointernet Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Net and Indointernet Tbk.
Diversification Opportunities for Bank Net and Indointernet Tbk
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Indointernet is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bank Net Indonesia and Indointernet Tbk PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indointernet Tbk 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 Indointernet Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indointernet Tbk has no effect on the direction of Bank Net i.e., Bank Net and Indointernet Tbk go up and down completely randomly.
Pair Corralation between Bank Net and Indointernet Tbk
Assuming the 90 days trading horizon Bank Net Indonesia is expected to under-perform the Indointernet Tbk. But the stock apears to be less risky and, when comparing its historical volatility, Bank Net Indonesia is 2.51 times less risky than Indointernet Tbk. The stock trades about -0.11 of its potential returns per unit of risk. The Indointernet Tbk PT is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 373,000 in Indointernet Tbk PT on October 26, 2024 and sell it today you would lose (2,000) from holding Indointernet Tbk PT or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Net Indonesia vs. Indointernet Tbk PT
Performance |
| Timeline |
| Bank Net Indonesia |
| Indointernet Tbk |
Bank Net and Indointernet Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Net and Indointernet Tbk
The main advantage of trading using opposite Bank Net and Indointernet Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Net position performs unexpectedly, Indointernet Tbk 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 Indointernet Tbk will offset losses from the drop in Indointernet Tbk'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 |
| Indointernet Tbk vs. DCI Indonesia Tbk | Indointernet Tbk vs. Digital Mediatama Maxima | Indointernet Tbk vs. Multipolar Technology Tbk | Indointernet Tbk vs. Bank Net 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |