Correlation Between Bank Bukopin and Megapower Makmur
Can any of the company-specific risk be diversified away by investing in both Bank Bukopin and Megapower Makmur 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 Megapower Makmur 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 Megapower Makmur TBK, you can compare the effects of market volatilities on Bank Bukopin and Megapower Makmur 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 Megapower Makmur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Bukopin and Megapower Makmur.
Diversification Opportunities for Bank Bukopin and Megapower Makmur
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Megapower is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bank Bukopin Tbk and Megapower Makmur TBK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Megapower Makmur 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 Megapower Makmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Megapower Makmur TBK has no effect on the direction of Bank Bukopin i.e., Bank Bukopin and Megapower Makmur go up and down completely randomly.
Pair Corralation between Bank Bukopin and Megapower Makmur
Assuming the 90 days trading horizon Bank Bukopin is expected to generate 8.19 times less return on investment than Megapower Makmur. But when comparing it to its historical volatility, Bank Bukopin Tbk is 5.07 times less risky than Megapower Makmur. It trades about 0.06 of its potential returns per unit of risk. Megapower Makmur TBK is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 9,300 in Megapower Makmur TBK on October 21, 2024 and sell it today you would earn a total of 1,100 from holding Megapower Makmur TBK or generate 11.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Bukopin Tbk vs. Megapower Makmur TBK
Performance |
| Timeline |
| Bank Bukopin Tbk |
| Megapower Makmur TBK |
Bank Bukopin and Megapower Makmur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Bukopin and Megapower Makmur
The main advantage of trading using opposite Bank Bukopin and Megapower Makmur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Bukopin position performs unexpectedly, Megapower Makmur 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 Megapower Makmur will offset losses from the drop in Megapower Makmur'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 |
| Megapower Makmur vs. Puradelta Lestari PT | Megapower Makmur vs. Mitra Pinasthika Mustika | Megapower Makmur vs. Wijaya Karya Bangunan | Megapower Makmur vs. PT Sarana Menara |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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