Correlation Between Bank Central and Vastland Indonesia
Can any of the company-specific risk be diversified away by investing in both Bank Central and Vastland Indonesia 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 Vastland Indonesia 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 Vastland Indonesia, you can compare the effects of market volatilities on Bank Central and Vastland Indonesia 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 Vastland Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Vastland Indonesia.
Diversification Opportunities for Bank Central and Vastland Indonesia
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Vastland is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Vastland Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastland Indonesia 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 Vastland Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastland Indonesia has no effect on the direction of Bank Central i.e., Bank Central and Vastland Indonesia go up and down completely randomly.
Pair Corralation between Bank Central and Vastland Indonesia
Assuming the 90 days trading horizon Bank Central Asia is expected to under-perform the Vastland Indonesia. But the stock apears to be less risky and, when comparing its historical volatility, Bank Central Asia is 2.19 times less risky than Vastland Indonesia. The stock trades about -0.13 of its potential returns per unit of risk. The Vastland Indonesia is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 7,100 in Vastland Indonesia on September 2, 2024 and sell it today you would earn a total of 500.00 from holding Vastland Indonesia or generate 7.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Bank Central Asia vs. Vastland Indonesia
Performance |
| Timeline |
| Bank Central Asia |
| Vastland Indonesia |
Bank Central and Vastland Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Vastland Indonesia
The main advantage of trading using opposite Bank Central and Vastland Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, Vastland Indonesia 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 Vastland Indonesia will offset losses from the drop in Vastland Indonesia's long position.| Bank Central vs. Bank BRISyariah Tbk | Bank Central vs. Ace Hardware Indonesia | Bank Central vs. Merdeka Copper Gold | Bank Central vs. Mitra Pinasthika Mustika |
| Vastland Indonesia vs. Bank Central Asia | Vastland Indonesia vs. Bank Rakyat Indonesia | Vastland Indonesia vs. Bayan Resources Tbk | Vastland Indonesia vs. Bank Mandiri Persero |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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