Correlation Between Bank Pembangunan and Bank Pan
Can any of the company-specific risk be diversified away by investing in both Bank Pembangunan and Bank Pan 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 Pembangunan and Bank Pan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Pembangunan Daerah and Bank Pan Indonesia, you can compare the effects of market volatilities on Bank Pembangunan and Bank Pan 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 Pembangunan with a short position of Bank Pan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Pembangunan and Bank Pan.
Diversification Opportunities for Bank Pembangunan and Bank Pan
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Bank is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bank Pembangunan Daerah and Bank Pan Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Pan Indonesia and Bank Pembangunan 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 Pembangunan Daerah are associated (or correlated) with Bank Pan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Pan Indonesia has no effect on the direction of Bank Pembangunan i.e., Bank Pembangunan and Bank Pan go up and down completely randomly.
Pair Corralation between Bank Pembangunan and Bank Pan
Assuming the 90 days trading horizon Bank Pembangunan Daerah is expected to generate 2.67 times more return on investment than Bank Pan. However, Bank Pembangunan is 2.67 times more volatile than Bank Pan Indonesia. It trades about 0.01 of its potential returns per unit of risk. Bank Pan Indonesia is currently generating about -0.11 per unit of risk. If you would invest 3,400 in Bank Pembangunan Daerah on August 25, 2024 and sell it today you would lose (100.00) from holding Bank Pembangunan Daerah or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Pembangunan Daerah vs. Bank Pan Indonesia
Performance |
| Timeline |
| Bank Pembangunan Daerah |
| Bank Pan Indonesia |
Bank Pembangunan and Bank Pan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Pembangunan and Bank Pan
The main advantage of trading using opposite Bank Pembangunan and Bank Pan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Pembangunan position performs unexpectedly, Bank Pan 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 Pan will offset losses from the drop in Bank Pan's long position.| Bank Pembangunan vs. Paninvest Tbk | Bank Pembangunan vs. Maskapai Reasuransi Indonesia | Bank Pembangunan vs. Panin Sekuritas Tbk | Bank Pembangunan vs. Wahana Ottomitra Multiartha |
| Bank Pan vs. Paninvest Tbk | Bank Pan vs. Maskapai Reasuransi Indonesia | Bank Pan vs. Panin Sekuritas Tbk | Bank Pan vs. Wahana Ottomitra Multiartha |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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