Correlation Between Bank Negara and Panorama Sentrawisata
Can any of the company-specific risk be diversified away by investing in both Bank Negara and Panorama Sentrawisata 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 Panorama Sentrawisata 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 Panorama Sentrawisata Tbk, you can compare the effects of market volatilities on Bank Negara and Panorama Sentrawisata 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 Panorama Sentrawisata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Panorama Sentrawisata.
Diversification Opportunities for Bank Negara and Panorama Sentrawisata
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Panorama is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Panorama Sentrawisata Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panorama Sentrawisata 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 Panorama Sentrawisata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panorama Sentrawisata Tbk has no effect on the direction of Bank Negara i.e., Bank Negara and Panorama Sentrawisata go up and down completely randomly.
Pair Corralation between Bank Negara and Panorama Sentrawisata
Assuming the 90 days trading horizon Bank Negara Indonesia is expected to under-perform the Panorama Sentrawisata. In addition to that, Bank Negara is 1.02 times more volatile than Panorama Sentrawisata Tbk. It trades about -0.15 of its total potential returns per unit of risk. Panorama Sentrawisata Tbk is currently generating about 0.16 per unit of volatility. If you would invest 79,500 in Panorama Sentrawisata Tbk on November 27, 2024 and sell it today you would earn a total of 7,000 from holding Panorama Sentrawisata Tbk or generate 8.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Negara Indonesia vs. Panorama Sentrawisata Tbk
Performance |
| Timeline |
| Bank Negara Indonesia |
| Panorama Sentrawisata Tbk |
Bank Negara and Panorama Sentrawisata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and Panorama Sentrawisata
The main advantage of trading using opposite Bank Negara and Panorama Sentrawisata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, Panorama Sentrawisata 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 Panorama Sentrawisata will offset losses from the drop in Panorama Sentrawisata'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 |
| Panorama Sentrawisata vs. Pembangunan Jaya Ancol | Panorama Sentrawisata vs. Hotel Sahid Jaya | Panorama Sentrawisata vs. Pudjiadi Sons Tbk | Panorama Sentrawisata vs. Pioneerindo Gourmet International |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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