Correlation Between Graha Layar and Bank Pan
Can any of the company-specific risk be diversified away by investing in both Graha Layar and Bank Pan 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 Graha Layar and Bank Pan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graha Layar Prima and Bank Pan Indonesia, you can compare the effects of market volatilities on Graha Layar and Bank Pan 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 Graha Layar with a short position of Bank Pan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graha Layar and Bank Pan.
Diversification Opportunities for Graha Layar and Bank Pan
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Graha and Bank is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Graha Layar Prima and Bank Pan Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Pan Indonesia and Graha Layar 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 Graha Layar Prima are associated (or correlated) with Bank Pan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Pan Indonesia has no effect on the direction of Graha Layar i.e., Graha Layar and Bank Pan go up and down completely randomly.
Pair Corralation between Graha Layar and Bank Pan
Assuming the 90 days trading horizon Graha Layar Prima is expected to generate 1.82 times more return on investment than Bank Pan. However, Graha Layar is 1.82 times more volatile than Bank Pan Indonesia. It trades about 0.03 of its potential returns per unit of risk. Bank Pan Indonesia is currently generating about 0.01 per unit of risk. If you would invest 177,500 in Graha Layar Prima on August 27, 2024 and sell it today you would earn a total of 22,500 from holding Graha Layar Prima or generate 12.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.37% |
| Values | Daily Returns |
Graha Layar Prima vs. Bank Pan Indonesia
Performance |
| Timeline |
| Graha Layar Prima |
| Bank Pan Indonesia |
Graha Layar and Bank Pan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graha Layar and Bank Pan
The main advantage of trading using opposite Graha Layar and Bank Pan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graha Layar position performs unexpectedly, Bank Pan 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 Pan will offset losses from the drop in Bank Pan's long position.| Graha Layar vs. Electronic City Indonesia | Graha Layar vs. Bayu Buana Tbk | Graha Layar vs. Bintang Oto Global | Graha Layar vs. Garuda Metalindo Tbk |
| Bank Pan vs. Paninvest Tbk | Bank Pan vs. Wahana Ottomitra Multiartha | Bank Pan vs. Lenox Pasifik Investama |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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