Correlation Between Bank Central and Trias Sentosa
Can any of the company-specific risk be diversified away by investing in both Bank Central and Trias Sentosa 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 Trias Sentosa 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 Trias Sentosa Tbk, you can compare the effects of market volatilities on Bank Central and Trias Sentosa 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 Trias Sentosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Trias Sentosa.
Diversification Opportunities for Bank Central and Trias Sentosa
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Trias is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Trias Sentosa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trias Sentosa 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 Trias Sentosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trias Sentosa Tbk has no effect on the direction of Bank Central i.e., Bank Central and Trias Sentosa go up and down completely randomly.
Pair Corralation between Bank Central and Trias Sentosa
Assuming the 90 days trading horizon Bank Central Asia is expected to generate 0.46 times more return on investment than Trias Sentosa. However, Bank Central Asia is 2.15 times less risky than Trias Sentosa. It trades about 0.05 of its potential returns per unit of risk. Trias Sentosa Tbk is currently generating about 0.01 per unit of risk. If you would invest 876,045 in Bank Central Asia on September 1, 2024 and sell it today you would earn a total of 123,955 from holding Bank Central Asia or generate 14.15% 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. Trias Sentosa Tbk
Performance |
| Timeline |
| Bank Central Asia |
| Trias Sentosa Tbk |
Bank Central and Trias Sentosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Trias Sentosa
The main advantage of trading using opposite Bank Central and Trias Sentosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, Trias Sentosa 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 Trias Sentosa will offset losses from the drop in Trias Sentosa'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 |
| Trias Sentosa vs. Perusahaan Gas Negara | Trias Sentosa vs. Telkom Indonesia Tbk | Trias Sentosa vs. Mitra Pinasthika Mustika | Trias Sentosa vs. Jakarta Int Hotels |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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