Correlation Between Bank Rakyat and Global Sukses
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Global Sukses 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 Global Sukses 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 Global Sukses Solusi, you can compare the effects of market volatilities on Bank Rakyat and Global Sukses 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 Global Sukses. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Global Sukses.
Diversification Opportunities for Bank Rakyat and Global Sukses
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Global is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat Indonesia and Global Sukses Solusi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Sukses Solusi 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 Global Sukses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Sukses Solusi has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Global Sukses go up and down completely randomly.
Pair Corralation between Bank Rakyat and Global Sukses
Assuming the 90 days trading horizon Bank Rakyat Indonesia is expected to under-perform the Global Sukses. But the stock apears to be less risky and, when comparing its historical volatility, Bank Rakyat Indonesia is 2.38 times less risky than Global Sukses. The stock trades about -0.3 of its potential returns per unit of risk. The Global Sukses Solusi is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 8,200 in Global Sukses Solusi on September 2, 2024 and sell it today you would lose (800.00) from holding Global Sukses Solusi or give up 9.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat Indonesia vs. Global Sukses Solusi
Performance |
| Timeline |
| Bank Rakyat Indonesia |
| Global Sukses Solusi |
Bank Rakyat and Global Sukses Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Global Sukses
The main advantage of trading using opposite Bank Rakyat and Global Sukses positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Global Sukses 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 Global Sukses will offset losses from the drop in Global Sukses' 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 |
| Global Sukses vs. Trimegah Karya Pratama | Global Sukses vs. Surya Biru Murni | Global Sukses vs. Indo Oil Perkasa | Global Sukses vs. Wira Global Solusi |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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