Correlation Between Bank Negara and Maming Enam
Can any of the company-specific risk be diversified away by investing in both Bank Negara and Maming Enam 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 Negara and Maming Enam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Negara Indonesia and Maming Enam Sembilan, you can compare the effects of market volatilities on Bank Negara and Maming Enam 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 Negara with a short position of Maming Enam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Maming Enam.
Diversification Opportunities for Bank Negara and Maming Enam
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Maming is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Maming Enam Sembilan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maming Enam Sembilan and Bank Negara 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 Negara Indonesia are associated (or correlated) with Maming Enam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maming Enam Sembilan has no effect on the direction of Bank Negara i.e., Bank Negara and Maming Enam go up and down completely randomly.
Pair Corralation between Bank Negara and Maming Enam
Assuming the 90 days trading horizon Bank Negara Indonesia is expected to under-perform the Maming Enam. But the stock apears to be less risky and, when comparing its historical volatility, Bank Negara Indonesia is 3.87 times less risky than Maming Enam. The stock trades about -0.03 of its potential returns per unit of risk. The Maming Enam Sembilan is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 16,300 in Maming Enam Sembilan on November 4, 2024 and sell it today you would earn a total of 3,900 from holding Maming Enam Sembilan or generate 23.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Negara Indonesia vs. Maming Enam Sembilan
Performance |
| Timeline |
| Bank Negara Indonesia |
| Maming Enam Sembilan |
Bank Negara and Maming Enam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and Maming Enam
The main advantage of trading using opposite Bank Negara and Maming Enam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, Maming Enam 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 Maming Enam will offset losses from the drop in Maming Enam's long position.| Bank Negara vs. Bank Mandiri Persero | Bank Negara vs. Bank Rakyat Indonesia | Bank Negara vs. Bank Central Asia | Bank Negara vs. Astra International Tbk |
| Maming Enam vs. Asuransi Dayin Mitra | Maming Enam vs. Asuransi Harta Aman | Maming Enam vs. Asuransi Bintang Tbk | Maming Enam vs. Asuransi Ramayana Tbk |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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