Correlation Between Bank Rakyat and Alkindo Naratama
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Alkindo Naratama 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 Alkindo Naratama 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 Alkindo Naratama Tbk, you can compare the effects of market volatilities on Bank Rakyat and Alkindo Naratama 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 Alkindo Naratama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Alkindo Naratama.
Diversification Opportunities for Bank Rakyat and Alkindo Naratama
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Alkindo is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat Indonesia and Alkindo Naratama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkindo Naratama Tbk 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 Alkindo Naratama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkindo Naratama Tbk has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Alkindo Naratama go up and down completely randomly.
Pair Corralation between Bank Rakyat and Alkindo Naratama
Assuming the 90 days trading horizon Bank Rakyat Indonesia is expected to generate 0.93 times more return on investment than Alkindo Naratama. However, Bank Rakyat Indonesia is 1.07 times less risky than Alkindo Naratama. It trades about -0.04 of its potential returns per unit of risk. Alkindo Naratama Tbk is currently generating about -0.29 per unit of risk. If you would invest 421,000 in Bank Rakyat Indonesia on November 2, 2024 and sell it today you would lose (10,000) from holding Bank Rakyat Indonesia or give up 2.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Bank Rakyat Indonesia vs. Alkindo Naratama Tbk
Performance |
| Timeline |
| Bank Rakyat Indonesia |
| Alkindo Naratama Tbk |
Bank Rakyat and Alkindo Naratama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Alkindo Naratama
The main advantage of trading using opposite Bank Rakyat and Alkindo Naratama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Alkindo Naratama 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 Alkindo Naratama will offset losses from the drop in Alkindo Naratama'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 |
| Alkindo Naratama vs. Argha Karya Prima | Alkindo Naratama vs. Gunawan Dianjaya Steel | Alkindo Naratama vs. Arwana Citramulia Tbk | Alkindo Naratama vs. Alakasa Industrindo 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |