Correlation Between Bank Central and Ciptadana Asset
Can any of the company-specific risk be diversified away by investing in both Bank Central and Ciptadana Asset 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 Ciptadana Asset 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 Ciptadana Asset Management, you can compare the effects of market volatilities on Bank Central and Ciptadana Asset 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 Ciptadana Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Ciptadana Asset.
Diversification Opportunities for Bank Central and Ciptadana Asset
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Ciptadana is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and Ciptadana Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ciptadana Asset Mana 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 Ciptadana Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ciptadana Asset Mana has no effect on the direction of Bank Central i.e., Bank Central and Ciptadana Asset go up and down completely randomly.
Pair Corralation between Bank Central and Ciptadana Asset
Assuming the 90 days trading horizon Bank Central Asia is expected to under-perform the Ciptadana Asset. But the stock apears to be less risky and, when comparing its historical volatility, Bank Central Asia is 1.82 times less risky than Ciptadana Asset. The stock trades about -0.12 of its potential returns per unit of risk. The Ciptadana Asset Management is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,700 in Ciptadana Asset Management on November 4, 2024 and sell it today you would earn a total of 100.00 from holding Ciptadana Asset Management or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Bank Central Asia vs. Ciptadana Asset Management
Performance |
| Timeline |
| Bank Central Asia |
| Ciptadana Asset Mana |
Bank Central and Ciptadana Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Ciptadana Asset
The main advantage of trading using opposite Bank Central and Ciptadana Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, Ciptadana Asset 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 Ciptadana Asset will offset losses from the drop in Ciptadana Asset'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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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