Correlation Between Bank Negara and Indospring Tbk
Can any of the company-specific risk be diversified away by investing in both Bank Negara and Indospring Tbk 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 Indospring Tbk 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 Indospring Tbk, you can compare the effects of market volatilities on Bank Negara and Indospring Tbk 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 Indospring Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Indospring Tbk.
Diversification Opportunities for Bank Negara and Indospring Tbk
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Indospring is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Indospring Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indospring Tbk 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 Indospring Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indospring Tbk has no effect on the direction of Bank Negara i.e., Bank Negara and Indospring Tbk go up and down completely randomly.
Pair Corralation between Bank Negara and Indospring Tbk
Assuming the 90 days trading horizon Bank Negara Indonesia is expected to under-perform the Indospring Tbk. But the stock apears to be less risky and, when comparing its historical volatility, Bank Negara Indonesia is 1.02 times less risky than Indospring Tbk. The stock trades about -0.15 of its potential returns per unit of risk. The Indospring Tbk is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 23,800 in Indospring Tbk on November 27, 2024 and sell it today you would lose (1,200) from holding Indospring Tbk or give up 5.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Negara Indonesia vs. Indospring Tbk
Performance |
| Timeline |
| Bank Negara Indonesia |
| Indospring Tbk |
Bank Negara and Indospring Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and Indospring Tbk
The main advantage of trading using opposite Bank Negara and Indospring Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, Indospring Tbk 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 Indospring Tbk will offset losses from the drop in Indospring Tbk'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 |
| Indospring Tbk vs. Indomobil Sukses Internasional | Indospring Tbk vs. Goodyear Indonesia Tbk | Indospring Tbk vs. Indorama Synthetics Tbk | Indospring Tbk vs. Astra Otoparts 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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