Correlation Between Bank Jabar and Timah Persero
Can any of the company-specific risk be diversified away by investing in both Bank Jabar and Timah Persero 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 Timah Persero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Jabar and Timah Persero Tbk, you can compare the effects of market volatilities on Bank Jabar and Timah Persero 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 Timah Persero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Jabar and Timah Persero.
Diversification Opportunities for Bank Jabar and Timah Persero
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Timah is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bank Jabar and Timah Persero Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timah Persero Tbk 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 Timah Persero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timah Persero Tbk has no effect on the direction of Bank Jabar i.e., Bank Jabar and Timah Persero go up and down completely randomly.
Pair Corralation between Bank Jabar and Timah Persero
Assuming the 90 days trading horizon Bank Jabar is expected to generate 0.15 times more return on investment than Timah Persero. However, Bank Jabar is 6.48 times less risky than Timah Persero. It trades about -0.18 of its potential returns per unit of risk. Timah Persero Tbk is currently generating about -0.08 per unit of risk. If you would invest 97,000 in Bank Jabar on August 27, 2024 and sell it today you would lose (2,500) from holding Bank Jabar or give up 2.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Jabar vs. Timah Persero Tbk
Performance |
| Timeline |
| Bank Jabar |
| Timah Persero Tbk |
Bank Jabar and Timah Persero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Jabar and Timah Persero
The main advantage of trading using opposite Bank Jabar and Timah Persero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Jabar position performs unexpectedly, Timah Persero 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 Timah Persero will offset losses from the drop in Timah Persero'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 |
| Timah Persero vs. Kedaung Indah Can | Timah Persero vs. Langgeng Makmur Industri | Timah Persero vs. Kabelindo Murni Tbk | Timah Persero vs. Mustika Ratu 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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