Correlation Between PT Bank and Citra Borneo
Can any of the company-specific risk be diversified away by investing in both PT Bank and Citra Borneo 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 PT Bank and Citra Borneo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Bisnis and Citra Borneo Utama, you can compare the effects of market volatilities on PT Bank and Citra Borneo 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 PT Bank with a short position of Citra Borneo. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Citra Borneo.
Diversification Opportunities for PT Bank and Citra Borneo
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BBSI and Citra is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Bisnis and Citra Borneo Utama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citra Borneo Utama and PT Bank 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 PT Bank Bisnis are associated (or correlated) with Citra Borneo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citra Borneo Utama has no effect on the direction of PT Bank i.e., PT Bank and Citra Borneo go up and down completely randomly.
Pair Corralation between PT Bank and Citra Borneo
Assuming the 90 days trading horizon PT Bank Bisnis is expected to under-perform the Citra Borneo. But the stock apears to be less risky and, when comparing its historical volatility, PT Bank Bisnis is 2.52 times less risky than Citra Borneo. The stock trades about -0.03 of its potential returns per unit of risk. The Citra Borneo Utama is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 95,000 in Citra Borneo Utama on November 3, 2024 and sell it today you would earn a total of 28,500 from holding Citra Borneo Utama or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Bisnis vs. Citra Borneo Utama
Performance |
| Timeline |
| PT Bank Bisnis |
| Citra Borneo Utama |
PT Bank and Citra Borneo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Citra Borneo
The main advantage of trading using opposite PT Bank and Citra Borneo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank position performs unexpectedly, Citra Borneo 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 Citra Borneo will offset losses from the drop in Citra Borneo's long position.| PT Bank vs. Bk Harda Internasional | PT Bank vs. Bank Yudha Bhakti | PT Bank vs. Bank Net Indonesia | PT Bank vs. Bank Amar Indonesia |
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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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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