Correlation Between Benakat Petroleum and Bank Mestika
Can any of the company-specific risk be diversified away by investing in both Benakat Petroleum and Bank Mestika 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 Benakat Petroleum and Bank Mestika into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benakat Petroleum Energy and Bank Mestika Dharma, you can compare the effects of market volatilities on Benakat Petroleum and Bank Mestika 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 Benakat Petroleum with a short position of Bank Mestika. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benakat Petroleum and Bank Mestika.
Diversification Opportunities for Benakat Petroleum and Bank Mestika
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Benakat and Bank is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Benakat Petroleum Energy and Bank Mestika Dharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mestika Dharma and Benakat Petroleum 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 Benakat Petroleum Energy are associated (or correlated) with Bank Mestika. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mestika Dharma has no effect on the direction of Benakat Petroleum i.e., Benakat Petroleum and Bank Mestika go up and down completely randomly.
Pair Corralation between Benakat Petroleum and Bank Mestika
Assuming the 90 days trading horizon Benakat Petroleum Energy is expected to generate 3.65 times more return on investment than Bank Mestika. However, Benakat Petroleum is 3.65 times more volatile than Bank Mestika Dharma. It trades about 0.1 of its potential returns per unit of risk. Bank Mestika Dharma is currently generating about 0.02 per unit of risk. If you would invest 6,500 in Benakat Petroleum Energy on September 3, 2024 and sell it today you would earn a total of 1,300 from holding Benakat Petroleum Energy or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benakat Petroleum Energy vs. Bank Mestika Dharma
Performance |
| Timeline |
| Benakat Petroleum Energy |
| Bank Mestika Dharma |
Benakat Petroleum and Bank Mestika Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benakat Petroleum and Bank Mestika
The main advantage of trading using opposite Benakat Petroleum and Bank Mestika positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benakat Petroleum position performs unexpectedly, Bank Mestika 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 Mestika will offset losses from the drop in Bank Mestika's long position.| Benakat Petroleum vs. Weha Transportasi Indonesia | Benakat Petroleum vs. Mitra Pinasthika Mustika | Benakat Petroleum vs. Jakarta Int Hotels | Benakat Petroleum vs. Asuransi Harta Aman |
| Bank Mestika vs. Bank Maspion Indonesia | Bank Mestika vs. Bank Sinarmas Tbk | Bank Mestika vs. Bank Ina Perdana | Bank Mestika vs. Bank Bumi Arta |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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