Correlation Between Bank Rakyat and Bhakti Multi
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Bhakti Multi 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 Bhakti Multi 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 Bhakti Multi Artha, you can compare the effects of market volatilities on Bank Rakyat and Bhakti Multi 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 Bhakti Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Bhakti Multi.
Diversification Opportunities for Bank Rakyat and Bhakti Multi
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Bhakti is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat Indonesia and Bhakti Multi Artha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bhakti Multi Artha 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 Bhakti Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bhakti Multi Artha has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Bhakti Multi go up and down completely randomly.
Pair Corralation between Bank Rakyat and Bhakti Multi
Assuming the 90 days trading horizon Bank Rakyat Indonesia is expected to generate 0.74 times more return on investment than Bhakti Multi. However, Bank Rakyat Indonesia is 1.34 times less risky than Bhakti Multi. It trades about -0.01 of its potential returns per unit of risk. Bhakti Multi Artha is currently generating about -0.05 per unit of risk. If you would invest 484,065 in Bank Rakyat Indonesia on August 29, 2024 and sell it today you would lose (41,065) from holding Bank Rakyat Indonesia or give up 8.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Bank Rakyat Indonesia vs. Bhakti Multi Artha
Performance |
| Timeline |
| Bank Rakyat Indonesia |
| Bhakti Multi Artha |
Bank Rakyat and Bhakti Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Bhakti Multi
The main advantage of trading using opposite Bank Rakyat and Bhakti Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Bhakti Multi 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 Bhakti Multi will offset losses from the drop in Bhakti Multi'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 |
| Bhakti Multi vs. Metro Healthcare Indonesia | Bhakti Multi vs. Bintang Oto Global | Bhakti Multi vs. Surya Permata Andalan | Bhakti Multi vs. Capital Financial Indonesia |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Global Correlations Find global opportunities by holding instruments from different markets |