Correlation Between Bank Rakyat and Maming Enam
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Maming Enam 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 Rakyat and Maming Enam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat Indonesia and Maming Enam Sembilan, you can compare the effects of market volatilities on Bank Rakyat and Maming Enam 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 Rakyat with a short position of Maming Enam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Maming Enam.
Diversification Opportunities for Bank Rakyat and Maming Enam
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Maming is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat Indonesia and Maming Enam Sembilan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maming Enam Sembilan and Bank Rakyat 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 Rakyat Indonesia are associated (or correlated) with Maming Enam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maming Enam Sembilan has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Maming Enam go up and down completely randomly.
Pair Corralation between Bank Rakyat and Maming Enam
Assuming the 90 days trading horizon Bank Rakyat Indonesia is expected to under-perform the Maming Enam. But the stock apears to be less risky and, when comparing its historical volatility, Bank Rakyat Indonesia is 4.02 times less risky than Maming Enam. The stock trades about -0.05 of its potential returns per unit of risk. The Maming Enam Sembilan is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 16,300 in Maming Enam Sembilan on November 4, 2024 and sell it today you would earn a total of 3,900 from holding Maming Enam Sembilan or generate 23.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat Indonesia vs. Maming Enam Sembilan
Performance |
| Timeline |
| Bank Rakyat Indonesia |
| Maming Enam Sembilan |
Bank Rakyat and Maming Enam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Maming Enam
The main advantage of trading using opposite Bank Rakyat and Maming Enam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Maming Enam 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 Maming Enam will offset losses from the drop in Maming Enam's long position.| Bank Rakyat vs. Bank Central Asia | Bank Rakyat vs. Bank Mandiri Persero | Bank Rakyat vs. Bank Negara Indonesia | Bank Rakyat vs. Telkom Indonesia Tbk |
| Maming Enam vs. Asuransi Dayin Mitra | Maming Enam vs. Asuransi Harta Aman | Maming Enam vs. Asuransi Bintang Tbk | Maming Enam vs. Asuransi Ramayana 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 Stocks Directory module to find actively traded stocks across global markets.
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