Correlation Between Bank Central and Asuransi Ramayana
Can any of the company-specific risk be diversified away by investing in both Bank Central and Asuransi Ramayana 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 Central and Asuransi Ramayana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and Asuransi Ramayana Tbk, you can compare the effects of market volatilities on Bank Central and Asuransi Ramayana 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 Central with a short position of Asuransi Ramayana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Asuransi Ramayana.
Diversification Opportunities for Bank Central and Asuransi Ramayana
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Asuransi is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Asuransi Ramayana Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Ramayana Tbk and Bank Central 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 Central Asia are associated (or correlated) with Asuransi Ramayana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Ramayana Tbk has no effect on the direction of Bank Central i.e., Bank Central and Asuransi Ramayana go up and down completely randomly.
Pair Corralation between Bank Central and Asuransi Ramayana
Assuming the 90 days trading horizon Bank Central Asia is expected to under-perform the Asuransi Ramayana. But the stock apears to be less risky and, when comparing its historical volatility, Bank Central Asia is 1.44 times less risky than Asuransi Ramayana. The stock trades about -0.07 of its potential returns per unit of risk. The Asuransi Ramayana Tbk is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 34,600 in Asuransi Ramayana Tbk on November 5, 2024 and sell it today you would lose (600.00) from holding Asuransi Ramayana Tbk or give up 1.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Central Asia vs. Asuransi Ramayana Tbk
Performance |
| Timeline |
| Bank Central Asia |
| Asuransi Ramayana Tbk |
Bank Central and Asuransi Ramayana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Asuransi Ramayana
The main advantage of trading using opposite Bank Central and Asuransi Ramayana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, Asuransi Ramayana 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 Asuransi Ramayana will offset losses from the drop in Asuransi Ramayana's long position.| Bank Central vs. Bank Rakyat Indonesia | Bank Central vs. Bank Mandiri Persero | Bank Central vs. Bank Negara Indonesia | Bank Central vs. Astra International Tbk |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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