Correlation Between Bank Rakyat and Martina Berto
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Martina Berto 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 Martina Berto 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 Martina Berto Tbk, you can compare the effects of market volatilities on Bank Rakyat and Martina Berto 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 Martina Berto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Martina Berto.
Diversification Opportunities for Bank Rakyat and Martina Berto
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Martina is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat Indonesia and Martina Berto Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martina Berto 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 Martina Berto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martina Berto Tbk has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Martina Berto go up and down completely randomly.
Pair Corralation between Bank Rakyat and Martina Berto
Assuming the 90 days trading horizon Bank Rakyat Indonesia is expected to under-perform the Martina Berto. In addition to that, Bank Rakyat is 1.1 times more volatile than Martina Berto Tbk. It trades about -0.17 of its total potential returns per unit of risk. Martina Berto Tbk is currently generating about -0.02 per unit of volatility. If you would invest 9,100 in Martina Berto Tbk on November 29, 2024 and sell it today you would lose (100.00) from holding Martina Berto Tbk or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bank Rakyat Indonesia vs. Martina Berto Tbk
Performance |
| Timeline |
| Bank Rakyat Indonesia |
| Martina Berto Tbk |
Bank Rakyat and Martina Berto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Martina Berto
The main advantage of trading using opposite Bank Rakyat and Martina Berto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Martina Berto 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 Martina Berto will offset losses from the drop in Martina Berto'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 |
| Martina Berto vs. Mustika Ratu Tbk | Martina Berto vs. Langgeng Makmur Industri | Martina Berto vs. Kedaung Indah Can | Martina Berto vs. Mandom Indonesia 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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