Correlation Between Bank Qnb and Bank Bumi
Can any of the company-specific risk be diversified away by investing in both Bank Qnb and Bank Bumi 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 Qnb and Bank Bumi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Qnb Indonesia and Bank Bumi Arta, you can compare the effects of market volatilities on Bank Qnb and Bank Bumi 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 Qnb with a short position of Bank Bumi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Qnb and Bank Bumi.
Diversification Opportunities for Bank Qnb and Bank Bumi
Very weak diversification
The 3 months correlation between Bank and Bank is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Bank Qnb Indonesia and Bank Bumi Arta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Bumi Arta and Bank Qnb 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 Qnb Indonesia are associated (or correlated) with Bank Bumi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Bumi Arta has no effect on the direction of Bank Qnb i.e., Bank Qnb and Bank Bumi go up and down completely randomly.
Pair Corralation between Bank Qnb and Bank Bumi
Assuming the 90 days trading horizon Bank Qnb Indonesia is expected to generate 1.6 times more return on investment than Bank Bumi. However, Bank Qnb is 1.6 times more volatile than Bank Bumi Arta. It trades about 0.0 of its potential returns per unit of risk. Bank Bumi Arta is currently generating about -0.01 per unit of risk. If you would invest 7,600 in Bank Qnb Indonesia on November 5, 2024 and sell it today you would lose (1,000.00) from holding Bank Qnb Indonesia or give up 13.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Qnb Indonesia vs. Bank Bumi Arta
Performance |
| Timeline |
| Bank Qnb Indonesia |
| Bank Bumi Arta |
Bank Qnb and Bank Bumi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Qnb and Bank Bumi
The main advantage of trading using opposite Bank Qnb and Bank Bumi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Qnb position performs unexpectedly, Bank Bumi 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 Bumi will offset losses from the drop in Bank Bumi's long position.| Bank Qnb vs. Bank Victoria International | Bank Qnb vs. Bank Mnc Internasional | Bank Qnb vs. Bank Bumi Arta | Bank Qnb vs. Bank Capital Indonesia |
| Bank Bumi vs. Bank Capital Indonesia | Bank Bumi vs. Bank Mnc Internasional | Bank Bumi vs. Bank Victoria International | Bank Bumi vs. Bank Qnb 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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