Correlation Between Bank Central and PT UBC
Can any of the company-specific risk be diversified away by investing in both Bank Central and PT UBC 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 PT UBC 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 PT UBC Medical, you can compare the effects of market volatilities on Bank Central and PT UBC 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 PT UBC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and PT UBC.
Diversification Opportunities for Bank Central and PT UBC
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bank and LABS is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and PT UBC Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT UBC Medical 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 PT UBC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT UBC Medical has no effect on the direction of Bank Central i.e., Bank Central and PT UBC go up and down completely randomly.
Pair Corralation between Bank Central and PT UBC
Assuming the 90 days trading horizon Bank Central is expected to generate 3.59 times less return on investment than PT UBC. But when comparing it to its historical volatility, Bank Central Asia is 2.83 times less risky than PT UBC. It trades about 0.0 of its potential returns per unit of risk. PT UBC Medical is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 13,700 in PT UBC Medical on November 5, 2024 and sell it today you would lose (1,000.00) from holding PT UBC Medical or give up 7.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 60.87% |
| Values | Daily Returns |
Bank Central Asia vs. PT UBC Medical
Performance |
| Timeline |
| Bank Central Asia |
| PT UBC Medical |
Bank Central and PT UBC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and PT UBC
The main advantage of trading using opposite Bank Central and PT UBC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, PT UBC 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 PT UBC will offset losses from the drop in PT UBC'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 |
| PT UBC vs. Indo Acidatama Tbk | PT UBC vs. PT Bank Bisnis | PT UBC vs. Pertamina Geothermal Energy | PT UBC vs. Smartfren Telecom Tbk |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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