Correlation Between Bank Net and Damai Sejahtera
Can any of the company-specific risk be diversified away by investing in both Bank Net and Damai Sejahtera 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 Damai Sejahtera 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 Damai Sejahtera Abadi, you can compare the effects of market volatilities on Bank Net and Damai Sejahtera 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 Damai Sejahtera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Net and Damai Sejahtera.
Diversification Opportunities for Bank Net and Damai Sejahtera
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Damai is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bank Net Indonesia and Damai Sejahtera Abadi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Damai Sejahtera Abadi 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 Damai Sejahtera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Damai Sejahtera Abadi has no effect on the direction of Bank Net i.e., Bank Net and Damai Sejahtera go up and down completely randomly.
Pair Corralation between Bank Net and Damai Sejahtera
Assuming the 90 days trading horizon Bank Net Indonesia is expected to under-perform the Damai Sejahtera. But the stock apears to be less risky and, when comparing its historical volatility, Bank Net Indonesia is 1.49 times less risky than Damai Sejahtera. The stock trades about -0.25 of its potential returns per unit of risk. The Damai Sejahtera Abadi is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 28,800 in Damai Sejahtera Abadi on September 3, 2024 and sell it today you would earn a total of 2,000 from holding Damai Sejahtera Abadi or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Net Indonesia vs. Damai Sejahtera Abadi
Performance |
| Timeline |
| Bank Net Indonesia |
| Damai Sejahtera Abadi |
Bank Net and Damai Sejahtera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Net and Damai Sejahtera
The main advantage of trading using opposite Bank Net and Damai Sejahtera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Net position performs unexpectedly, Damai Sejahtera 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 Damai Sejahtera will offset losses from the drop in Damai Sejahtera'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 |
| Damai Sejahtera vs. PT Sunter Lakeside | Damai Sejahtera vs. Widodo Makmur Unggas | Damai Sejahtera vs. Trisula Textile Industries | Damai Sejahtera vs. Diagnos Laboratorium Utama |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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