Correlation Between Bank Negara and Roda Vivatex
Can any of the company-specific risk be diversified away by investing in both Bank Negara and Roda Vivatex 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 Roda Vivatex 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 Roda Vivatex Tbk, you can compare the effects of market volatilities on Bank Negara and Roda Vivatex 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 Roda Vivatex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Roda Vivatex.
Diversification Opportunities for Bank Negara and Roda Vivatex
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Roda is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Roda Vivatex Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roda Vivatex 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 Roda Vivatex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roda Vivatex Tbk has no effect on the direction of Bank Negara i.e., Bank Negara and Roda Vivatex go up and down completely randomly.
Pair Corralation between Bank Negara and Roda Vivatex
Assuming the 90 days trading horizon Bank Negara Indonesia is expected to under-perform the Roda Vivatex. In addition to that, Bank Negara is 1.07 times more volatile than Roda Vivatex Tbk. It trades about -0.48 of its total potential returns per unit of risk. Roda Vivatex Tbk is currently generating about 0.07 per unit of volatility. If you would invest 1,467,500 in Roda Vivatex Tbk on August 24, 2024 and sell it today you would earn a total of 32,500 from holding Roda Vivatex Tbk or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Negara Indonesia vs. Roda Vivatex Tbk
Performance |
| Timeline |
| Bank Negara Indonesia |
| Roda Vivatex Tbk |
Bank Negara and Roda Vivatex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and Roda Vivatex
The main advantage of trading using opposite Bank Negara and Roda Vivatex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, Roda Vivatex 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 Roda Vivatex will offset losses from the drop in Roda Vivatex's long position.| Bank Negara vs. Paninvest Tbk | Bank Negara vs. Maskapai Reasuransi Indonesia | Bank Negara vs. Panin Sekuritas Tbk | Bank Negara vs. Wahana Ottomitra Multiartha |
| Roda Vivatex vs. Supreme Cable Manufacturing | Roda Vivatex vs. Ristia Bintang Mahkotasejati | Roda Vivatex vs. Ricky Putra Globalindo | Roda Vivatex vs. Suryamas Dutamakmur 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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