Correlation Between Bank Bukopin and Millennium Pharmacon
Can any of the company-specific risk be diversified away by investing in both Bank Bukopin and Millennium Pharmacon 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 Millennium Pharmacon 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 Millennium Pharmacon International, you can compare the effects of market volatilities on Bank Bukopin and Millennium Pharmacon 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 Millennium Pharmacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Bukopin and Millennium Pharmacon.
Diversification Opportunities for Bank Bukopin and Millennium Pharmacon
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Millennium is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bank Bukopin Tbk and Millennium Pharmacon Internati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millennium Pharmacon 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 Millennium Pharmacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millennium Pharmacon has no effect on the direction of Bank Bukopin i.e., Bank Bukopin and Millennium Pharmacon go up and down completely randomly.
Pair Corralation between Bank Bukopin and Millennium Pharmacon
Assuming the 90 days trading horizon Bank Bukopin Tbk is expected to under-perform the Millennium Pharmacon. But the stock apears to be less risky and, when comparing its historical volatility, Bank Bukopin Tbk is 1.21 times less risky than Millennium Pharmacon. The stock trades about -0.05 of its potential returns per unit of risk. The Millennium Pharmacon International is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 15,176 in Millennium Pharmacon International on January 24, 2025 and sell it today you would lose (3,376) from holding Millennium Pharmacon International or give up 22.25% 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. Millennium Pharmacon Internati
Performance |
| Timeline |
| Bank Bukopin Tbk |
| Millennium Pharmacon |
Bank Bukopin and Millennium Pharmacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Bukopin and Millennium Pharmacon
The main advantage of trading using opposite Bank Bukopin and Millennium Pharmacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Bukopin position performs unexpectedly, Millennium Pharmacon 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 Millennium Pharmacon will offset losses from the drop in Millennium Pharmacon'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 |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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