Correlation Between Bank Negara and Garda Tujuh
Can any of the company-specific risk be diversified away by investing in both Bank Negara and Garda Tujuh 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 Garda Tujuh 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 Garda Tujuh Buana, you can compare the effects of market volatilities on Bank Negara and Garda Tujuh 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 Garda Tujuh. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Garda Tujuh.
Diversification Opportunities for Bank Negara and Garda Tujuh
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Garda is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Garda Tujuh Buana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garda Tujuh Buana 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 Garda Tujuh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garda Tujuh Buana has no effect on the direction of Bank Negara i.e., Bank Negara and Garda Tujuh go up and down completely randomly.
Pair Corralation between Bank Negara and Garda Tujuh
Assuming the 90 days trading horizon Bank Negara is expected to generate 2.86 times less return on investment than Garda Tujuh. But when comparing it to its historical volatility, Bank Negara Indonesia is 1.05 times less risky than Garda Tujuh. It trades about 0.03 of its potential returns per unit of risk. Garda Tujuh Buana is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,251 in Garda Tujuh Buana on September 4, 2024 and sell it today you would earn a total of 16,549 from holding Garda Tujuh Buana or generate 228.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.58% |
| Values | Daily Returns |
Bank Negara Indonesia vs. Garda Tujuh Buana
Performance |
| Timeline |
| Bank Negara Indonesia |
| Garda Tujuh Buana |
Bank Negara and Garda Tujuh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and Garda Tujuh
The main advantage of trading using opposite Bank Negara and Garda Tujuh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, Garda Tujuh 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 Garda Tujuh will offset losses from the drop in Garda Tujuh'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 |
| Garda Tujuh vs. Weha Transportasi Indonesia | Garda Tujuh vs. Mitra Pinasthika Mustika | Garda Tujuh vs. Jakarta Int Hotels | Garda Tujuh vs. Asuransi Harta Aman |
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.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |