Correlation Between Bank Bukopin and Maskapai Reasuransi
Can any of the company-specific risk be diversified away by investing in both Bank Bukopin and Maskapai Reasuransi 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 Maskapai Reasuransi 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 Maskapai Reasuransi Indonesia, you can compare the effects of market volatilities on Bank Bukopin and Maskapai Reasuransi 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 Maskapai Reasuransi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Bukopin and Maskapai Reasuransi.
Diversification Opportunities for Bank Bukopin and Maskapai Reasuransi
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Maskapai is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bank Bukopin Tbk and Maskapai Reasuransi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maskapai Reasuransi 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 Maskapai Reasuransi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maskapai Reasuransi has no effect on the direction of Bank Bukopin i.e., Bank Bukopin and Maskapai Reasuransi go up and down completely randomly.
Pair Corralation between Bank Bukopin and Maskapai Reasuransi
Assuming the 90 days trading horizon Bank Bukopin Tbk is expected to under-perform the Maskapai Reasuransi. In addition to that, Bank Bukopin is 2.12 times more volatile than Maskapai Reasuransi Indonesia. It trades about -0.15 of its total potential returns per unit of risk. Maskapai Reasuransi Indonesia is currently generating about -0.09 per unit of volatility. If you would invest 100,000 in Maskapai Reasuransi Indonesia on August 29, 2024 and sell it today you would lose (2,000) from holding Maskapai Reasuransi Indonesia or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Bukopin Tbk vs. Maskapai Reasuransi Indonesia
Performance |
| Timeline |
| Bank Bukopin Tbk |
| Maskapai Reasuransi |
Bank Bukopin and Maskapai Reasuransi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Bukopin and Maskapai Reasuransi
The main advantage of trading using opposite Bank Bukopin and Maskapai Reasuransi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Bukopin position performs unexpectedly, Maskapai Reasuransi 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 Maskapai Reasuransi will offset losses from the drop in Maskapai Reasuransi'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 |
| Maskapai Reasuransi vs. Lippo General Insurance | Maskapai Reasuransi vs. Paninvest Tbk | Maskapai Reasuransi vs. Mandala Multifinance Tbk | Maskapai Reasuransi vs. Bank Mayapada Internasional |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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