Correlation Between Bank Tabungan and Bank Cimb
Can any of the company-specific risk be diversified away by investing in both Bank Tabungan and Bank Cimb 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 Tabungan and Bank Cimb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Tabungan Negara and Bank Cimb Niaga, you can compare the effects of market volatilities on Bank Tabungan and Bank Cimb 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 Tabungan with a short position of Bank Cimb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Tabungan and Bank Cimb.
Diversification Opportunities for Bank Tabungan and Bank Cimb
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Bank is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Bank Tabungan Negara and Bank Cimb Niaga in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Cimb Niaga and Bank Tabungan 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 Tabungan Negara are associated (or correlated) with Bank Cimb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Cimb Niaga has no effect on the direction of Bank Tabungan i.e., Bank Tabungan and Bank Cimb go up and down completely randomly.
Pair Corralation between Bank Tabungan and Bank Cimb
Assuming the 90 days trading horizon Bank Tabungan Negara is expected to generate 1.51 times more return on investment than Bank Cimb. However, Bank Tabungan is 1.51 times more volatile than Bank Cimb Niaga. It trades about 0.03 of its potential returns per unit of risk. Bank Cimb Niaga is currently generating about 0.03 per unit of risk. If you would invest 122,500 in Bank Tabungan Negara on August 29, 2024 and sell it today you would earn a total of 7,000 from holding Bank Tabungan Negara or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Tabungan Negara vs. Bank Cimb Niaga
Performance |
| Timeline |
| Bank Tabungan Negara |
| Bank Cimb Niaga |
Bank Tabungan and Bank Cimb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Tabungan and Bank Cimb
The main advantage of trading using opposite Bank Tabungan and Bank Cimb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Tabungan position performs unexpectedly, Bank Cimb 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 Bank Cimb will offset losses from the drop in Bank Cimb's long position.| Bank Tabungan vs. Bank Negara Indonesia | Bank Tabungan vs. Bank Mandiri Persero | Bank Tabungan vs. Bank Jabar | Bank Tabungan vs. Jasa Marga Tbk |
| Bank Cimb vs. Bank Danamon Indonesia | Bank Cimb vs. Bank Maybank Indonesia | Bank Cimb vs. Bank Pan Indonesia | Bank Cimb vs. Indosat 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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