Correlation Between Bank Central and Ristia Bintang
Can any of the company-specific risk be diversified away by investing in both Bank Central and Ristia Bintang 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 Ristia Bintang 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 Ristia Bintang Mahkotasejati, you can compare the effects of market volatilities on Bank Central and Ristia Bintang 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 Ristia Bintang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Ristia Bintang.
Diversification Opportunities for Bank Central and Ristia Bintang
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Ristia is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Ristia Bintang Mahkotasejati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ristia Bintang Mahko 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 Ristia Bintang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ristia Bintang Mahko has no effect on the direction of Bank Central i.e., Bank Central and Ristia Bintang go up and down completely randomly.
Pair Corralation between Bank Central and Ristia Bintang
Assuming the 90 days trading horizon Bank Central Asia is expected to generate 0.44 times more return on investment than Ristia Bintang. However, Bank Central Asia is 2.26 times less risky than Ristia Bintang. It trades about 0.02 of its potential returns per unit of risk. Ristia Bintang Mahkotasejati is currently generating about -0.04 per unit of risk. If you would invest 928,856 in Bank Central Asia on October 24, 2024 and sell it today you would earn a total of 33,644 from holding Bank Central Asia or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Central Asia vs. Ristia Bintang Mahkotasejati
Performance |
| Timeline |
| Bank Central Asia |
| Ristia Bintang Mahko |
Bank Central and Ristia Bintang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Ristia Bintang
The main advantage of trading using opposite Bank Central and Ristia Bintang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, Ristia Bintang 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 Ristia Bintang will offset losses from the drop in Ristia Bintang'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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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