Correlation Between Bank Jabar and Bank Danamon
Can any of the company-specific risk be diversified away by investing in both Bank Jabar and Bank Danamon 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 Jabar and Bank Danamon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Jabar and Bank Danamon Indonesia, you can compare the effects of market volatilities on Bank Jabar and Bank Danamon 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 Jabar with a short position of Bank Danamon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Jabar and Bank Danamon.
Diversification Opportunities for Bank Jabar and Bank Danamon
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Bank is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bank Jabar and Bank Danamon Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Danamon Indonesia and Bank Jabar 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 Jabar are associated (or correlated) with Bank Danamon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Danamon Indonesia has no effect on the direction of Bank Jabar i.e., Bank Jabar and Bank Danamon go up and down completely randomly.
Pair Corralation between Bank Jabar and Bank Danamon
Assuming the 90 days trading horizon Bank Jabar is expected to under-perform the Bank Danamon. But the stock apears to be less risky and, when comparing its historical volatility, Bank Jabar is 1.07 times less risky than Bank Danamon. The stock trades about -0.09 of its potential returns per unit of risk. The Bank Danamon Indonesia is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 276,707 in Bank Danamon Indonesia on September 1, 2024 and sell it today you would lose (24,707) from holding Bank Danamon Indonesia or give up 8.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.44% |
| Values | Daily Returns |
Bank Jabar vs. Bank Danamon Indonesia
Performance |
| Timeline |
| Bank Jabar |
| Bank Danamon Indonesia |
Bank Jabar and Bank Danamon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Jabar and Bank Danamon
The main advantage of trading using opposite Bank Jabar and Bank Danamon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Jabar position performs unexpectedly, Bank Danamon 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 Danamon will offset losses from the drop in Bank Danamon's long position.| Bank Jabar vs. Bank Pembangunan Timur | Bank Jabar vs. Bank Tabungan Negara | Bank Jabar vs. Bank Danamon Indonesia | Bank Jabar vs. Bumi Serpong Damai |
| Bank Danamon vs. Bank BRISyariah Tbk | Bank Danamon vs. Ace Hardware Indonesia | Bank Danamon vs. Merdeka Copper Gold | Bank Danamon vs. Mitra Pinasthika Mustika |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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