Correlation Between Bank Rakyat and Sekar Bumi
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Sekar Bumi 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 Sekar Bumi 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 Sekar Bumi Tbk, you can compare the effects of market volatilities on Bank Rakyat and Sekar Bumi 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 Sekar Bumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Sekar Bumi.
Diversification Opportunities for Bank Rakyat and Sekar Bumi
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Sekar is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat Indonesia and Sekar Bumi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekar Bumi 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 Sekar Bumi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekar Bumi Tbk has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Sekar Bumi go up and down completely randomly.
Pair Corralation between Bank Rakyat and Sekar Bumi
Assuming the 90 days trading horizon Bank Rakyat Indonesia is expected to under-perform the Sekar Bumi. But the stock apears to be less risky and, when comparing its historical volatility, Bank Rakyat Indonesia is 3.28 times less risky than Sekar Bumi. The stock trades about -0.01 of its potential returns per unit of risk. The Sekar Bumi Tbk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 39,117 in Sekar Bumi Tbk on November 29, 2024 and sell it today you would lose (1,517) from holding Sekar Bumi Tbk or give up 3.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Rakyat Indonesia vs. Sekar Bumi Tbk
Performance |
| Timeline |
| Bank Rakyat Indonesia |
| Sekar Bumi Tbk |
Bank Rakyat and Sekar Bumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Sekar Bumi
The main advantage of trading using opposite Bank Rakyat and Sekar Bumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Sekar Bumi 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 Sekar Bumi will offset losses from the drop in Sekar Bumi'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 |
| Sekar Bumi vs. Sekar Laut Tbk | Sekar Bumi vs. Siantar Top Tbk | Sekar Bumi vs. Prasidha Aneka Niaga | Sekar Bumi 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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