Correlation Between Bank Pembangunan and PT Sarana
Can any of the company-specific risk be diversified away by investing in both Bank Pembangunan and PT Sarana 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 PT Sarana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Pembangunan Timur and PT Sarana Menara, you can compare the effects of market volatilities on Bank Pembangunan and PT Sarana 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 PT Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Pembangunan and PT Sarana.
Diversification Opportunities for Bank Pembangunan and PT Sarana
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and TOWR is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank Pembangunan Timur and PT Sarana Menara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sarana Menara 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 Timur are associated (or correlated) with PT Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sarana Menara has no effect on the direction of Bank Pembangunan i.e., Bank Pembangunan and PT Sarana go up and down completely randomly.
Pair Corralation between Bank Pembangunan and PT Sarana
Assuming the 90 days trading horizon Bank Pembangunan Timur is expected to generate 0.63 times more return on investment than PT Sarana. However, Bank Pembangunan Timur is 1.6 times less risky than PT Sarana. It trades about -0.08 of its potential returns per unit of risk. PT Sarana Menara is currently generating about -0.37 per unit of risk. If you would invest 57,000 in Bank Pembangunan Timur on August 28, 2024 and sell it today you would lose (1,500) from holding Bank Pembangunan Timur or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Pembangunan Timur vs. PT Sarana Menara
Performance |
| Timeline |
| Bank Pembangunan Timur |
| PT Sarana Menara |
Bank Pembangunan and PT Sarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Pembangunan and PT Sarana
The main advantage of trading using opposite Bank Pembangunan and PT Sarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Pembangunan position performs unexpectedly, PT Sarana 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 PT Sarana will offset losses from the drop in PT Sarana's long position.| Bank Pembangunan vs. Bank Jabar | Bank Pembangunan vs. Sido Muncul PT | Bank Pembangunan vs. Bank Negara Indonesia | Bank Pembangunan vs. Bank Tabungan Negara |
| PT Sarana vs. Tower Bersama Infrastructure | PT Sarana vs. Merdeka Copper Gold | PT Sarana vs. XL Axiata Tbk | PT Sarana vs. Japfa Comfeed Indonesia |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| CEOs Directory Screen CEOs from public companies around the world |