Correlation Between Bank Negara and PT Techno9
Can any of the company-specific risk be diversified away by investing in both Bank Negara and PT Techno9 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 PT Techno9 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 PT Techno9 Indonesia, you can compare the effects of market volatilities on Bank Negara and PT Techno9 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 PT Techno9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and PT Techno9.
Diversification Opportunities for Bank Negara and PT Techno9
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and NINE is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and PT Techno9 Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Techno9 Indonesia 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 PT Techno9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Techno9 Indonesia has no effect on the direction of Bank Negara i.e., Bank Negara and PT Techno9 go up and down completely randomly.
Pair Corralation between Bank Negara and PT Techno9
Assuming the 90 days trading horizon Bank Negara Indonesia is expected to under-perform the PT Techno9. But the stock apears to be less risky and, when comparing its historical volatility, Bank Negara Indonesia is 1.49 times less risky than PT Techno9. The stock trades about -0.13 of its potential returns per unit of risk. The PT Techno9 Indonesia is currently generating about 2.58 of returns per unit of risk over similar time horizon. If you would invest 1,000.00 in PT Techno9 Indonesia on September 1, 2024 and sell it today you would earn a total of 3,200 from holding PT Techno9 Indonesia or generate 320.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Negara Indonesia vs. PT Techno9 Indonesia
Performance |
| Timeline |
| Bank Negara Indonesia |
| PT Techno9 Indonesia |
Bank Negara and PT Techno9 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and PT Techno9
The main advantage of trading using opposite Bank Negara and PT Techno9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, PT Techno9 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 PT Techno9 will offset losses from the drop in PT Techno9'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 |
| PT Techno9 vs. Multipolar Technology Tbk | PT Techno9 vs. Digital Mediatama Maxima | PT Techno9 vs. NFC Indonesia PT | PT Techno9 vs. Kioson Komersial Indonesia |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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