Correlation Between Bank Negara and Trias Sentosa
Can any of the company-specific risk be diversified away by investing in both Bank Negara and Trias Sentosa 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 Trias Sentosa 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 Trias Sentosa Tbk, you can compare the effects of market volatilities on Bank Negara and Trias Sentosa 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 Trias Sentosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Trias Sentosa.
Diversification Opportunities for Bank Negara and Trias Sentosa
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Trias is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Trias Sentosa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trias Sentosa 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 Trias Sentosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trias Sentosa Tbk has no effect on the direction of Bank Negara i.e., Bank Negara and Trias Sentosa go up and down completely randomly.
Pair Corralation between Bank Negara and Trias Sentosa
Assuming the 90 days trading horizon Bank Negara Indonesia is expected to generate 0.65 times more return on investment than Trias Sentosa. However, Bank Negara Indonesia is 1.55 times less risky than Trias Sentosa. It trades about 0.0 of its potential returns per unit of risk. Trias Sentosa Tbk is currently generating about -0.01 per unit of risk. If you would invest 444,985 in Bank Negara Indonesia on November 27, 2024 and sell it today you would lose (22,985) from holding Bank Negara Indonesia or give up 5.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.33% |
| Values | Daily Returns |
Bank Negara Indonesia vs. Trias Sentosa Tbk
Performance |
| Timeline |
| Bank Negara Indonesia |
| Trias Sentosa Tbk |
Bank Negara and Trias Sentosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and Trias Sentosa
The main advantage of trading using opposite Bank Negara and Trias Sentosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, Trias Sentosa 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 Trias Sentosa will offset losses from the drop in Trias Sentosa'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 |
| Trias Sentosa vs. Suparma Tbk | Trias Sentosa vs. Champion Pacific Indonesia | Trias Sentosa vs. Indo Acidatama Tbk | Trias Sentosa vs. Unggul Indah Cahaya |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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