Correlation Between Bk Harda and Bank Amar
Can any of the company-specific risk be diversified away by investing in both Bk Harda and Bank Amar 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 Bk Harda and Bank Amar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bk Harda Internasional and Bank Amar Indonesia, you can compare the effects of market volatilities on Bk Harda and Bank Amar 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 Bk Harda with a short position of Bank Amar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bk Harda and Bank Amar.
Diversification Opportunities for Bk Harda and Bank Amar
Poor diversification
The 3 months correlation between BBHI and Bank is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bk Harda Internasional and Bank Amar Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Amar Indonesia and Bk Harda 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 Bk Harda Internasional are associated (or correlated) with Bank Amar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Amar Indonesia has no effect on the direction of Bk Harda i.e., Bk Harda and Bank Amar go up and down completely randomly.
Pair Corralation between Bk Harda and Bank Amar
Assuming the 90 days trading horizon Bk Harda Internasional is expected to under-perform the Bank Amar. In addition to that, Bk Harda is 2.08 times more volatile than Bank Amar Indonesia. It trades about -0.1 of its total potential returns per unit of risk. Bank Amar Indonesia is currently generating about -0.16 per unit of volatility. If you would invest 21,400 in Bank Amar Indonesia on August 28, 2024 and sell it today you would lose (1,200) from holding Bank Amar Indonesia or give up 5.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bk Harda Internasional vs. Bank Amar Indonesia
Performance |
| Timeline |
| Bk Harda Internasional |
| Bank Amar Indonesia |
Bk Harda and Bank Amar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bk Harda and Bank Amar
The main advantage of trading using opposite Bk Harda and Bank Amar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bk Harda position performs unexpectedly, Bank Amar 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 Bank Amar will offset losses from the drop in Bank Amar's long position.| Bk Harda vs. Bank Artos Indonesia | Bk Harda vs. Bank Yudha Bhakti | Bk Harda vs. Bank Ganesha Tbk | Bk Harda vs. Bank Rakyat Indonesia |
| Bank Amar vs. Bank Artos Indonesia | Bank Amar vs. Bank Yudha Bhakti | Bank Amar vs. Bk Harda Internasional | Bank Amar vs. Bank Rakyat Indonesia |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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