Correlation Between Bank Bukopin and Bank Permata
Can any of the company-specific risk be diversified away by investing in both Bank Bukopin and Bank Permata 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 Bukopin and Bank Permata into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Bukopin Tbk and Bank Permata Tbk, you can compare the effects of market volatilities on Bank Bukopin and Bank Permata 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 Bukopin with a short position of Bank Permata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Bukopin and Bank Permata.
Diversification Opportunities for Bank Bukopin and Bank Permata
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Bank is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bank Bukopin Tbk and Bank Permata Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Permata Tbk and Bank Bukopin 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 Bukopin Tbk are associated (or correlated) with Bank Permata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Permata Tbk has no effect on the direction of Bank Bukopin i.e., Bank Bukopin and Bank Permata go up and down completely randomly.
Pair Corralation between Bank Bukopin and Bank Permata
Assuming the 90 days trading horizon Bank Bukopin Tbk is expected to under-perform the Bank Permata. But the stock apears to be less risky and, when comparing its historical volatility, Bank Bukopin Tbk is 1.29 times less risky than Bank Permata. The stock trades about -0.09 of its potential returns per unit of risk. The Bank Permata Tbk is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 120,000 in Bank Permata Tbk on October 26, 2024 and sell it today you would earn a total of 9,500 from holding Bank Permata Tbk or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Bukopin Tbk vs. Bank Permata Tbk
Performance |
| Timeline |
| Bank Bukopin Tbk |
| Bank Permata Tbk |
Bank Bukopin and Bank Permata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Bukopin and Bank Permata
The main advantage of trading using opposite Bank Bukopin and Bank Permata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Bukopin position performs unexpectedly, Bank Permata 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 Permata will offset losses from the drop in Bank Permata's long position.| Bank Bukopin vs. Bank Danamon Indonesia | Bank Bukopin vs. Bank Cimb Niaga | Bank Bukopin vs. Bank Tabungan Negara | Bank Bukopin vs. Bank Jabar |
| Bank Permata vs. Bank Cimb Niaga | Bank Permata vs. Bank Maybank Indonesia | Bank Permata vs. Bank Danamon Indonesia | Bank Permata vs. Bank Pan 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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