Correlation Between Bank Negara and Palma Serasih
Can any of the company-specific risk be diversified away by investing in both Bank Negara and Palma Serasih 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 Palma Serasih 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 Palma Serasih PT, you can compare the effects of market volatilities on Bank Negara and Palma Serasih 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 Palma Serasih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Palma Serasih.
Diversification Opportunities for Bank Negara and Palma Serasih
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Palma is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Palma Serasih PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palma Serasih PT 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 Palma Serasih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palma Serasih PT has no effect on the direction of Bank Negara i.e., Bank Negara and Palma Serasih go up and down completely randomly.
Pair Corralation between Bank Negara and Palma Serasih
Assuming the 90 days trading horizon Bank Negara Indonesia is expected to generate 1.37 times more return on investment than Palma Serasih. However, Bank Negara is 1.37 times more volatile than Palma Serasih PT. It trades about 0.2 of its potential returns per unit of risk. Palma Serasih PT is currently generating about 0.12 per unit of risk. If you would invest 443,000 in Bank Negara Indonesia on November 5, 2024 and sell it today you would earn a total of 40,000 from holding Bank Negara Indonesia or generate 9.03% 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. Palma Serasih PT
Performance |
| Timeline |
| Bank Negara Indonesia |
| Palma Serasih PT |
Bank Negara and Palma Serasih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and Palma Serasih
The main advantage of trading using opposite Bank Negara and Palma Serasih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, Palma Serasih 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 Palma Serasih will offset losses from the drop in Palma Serasih'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 |
| Palma Serasih vs. Mahkota Group Tbk | Palma Serasih vs. Provident Agro Tbk | Palma Serasih vs. Putra Mandiri Jembar | Palma Serasih vs. Cisadane Sawit Raya |
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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