Correlation Between Bank Maspion and Bank Sinarmas
Can any of the company-specific risk be diversified away by investing in both Bank Maspion and Bank Sinarmas 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 Maspion and Bank Sinarmas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Maspion Indonesia and Bank Sinarmas Tbk, you can compare the effects of market volatilities on Bank Maspion and Bank Sinarmas 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 Maspion with a short position of Bank Sinarmas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Maspion and Bank Sinarmas.
Diversification Opportunities for Bank Maspion and Bank Sinarmas
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Bank is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bank Maspion Indonesia and Bank Sinarmas Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Sinarmas Tbk and Bank Maspion 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 Maspion Indonesia are associated (or correlated) with Bank Sinarmas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Sinarmas Tbk has no effect on the direction of Bank Maspion i.e., Bank Maspion and Bank Sinarmas go up and down completely randomly.
Pair Corralation between Bank Maspion and Bank Sinarmas
Assuming the 90 days trading horizon Bank Maspion Indonesia is expected to generate 3.29 times more return on investment than Bank Sinarmas. However, Bank Maspion is 3.29 times more volatile than Bank Sinarmas Tbk. It trades about 0.07 of its potential returns per unit of risk. Bank Sinarmas Tbk is currently generating about -0.07 per unit of risk. If you would invest 51,000 in Bank Maspion Indonesia on August 28, 2024 and sell it today you would earn a total of 8,000 from holding Bank Maspion Indonesia or generate 15.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Maspion Indonesia vs. Bank Sinarmas Tbk
Performance |
| Timeline |
| Bank Maspion Indonesia |
| Bank Sinarmas Tbk |
Bank Maspion and Bank Sinarmas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Maspion and Bank Sinarmas
The main advantage of trading using opposite Bank Maspion and Bank Sinarmas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Maspion position performs unexpectedly, Bank Sinarmas 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 Sinarmas will offset losses from the drop in Bank Sinarmas' long position.| Bank Maspion vs. Bank Mestika Dharma | Bank Maspion vs. Bank Sinarmas Tbk | Bank Maspion vs. Bank Ina Perdana | Bank Maspion vs. Bank Qnb Indonesia |
| Bank Sinarmas vs. Bank Tabungan Pensiunan | Bank Sinarmas vs. Bank Bumi Arta | Bank Sinarmas vs. Bank Permata Tbk | Bank Sinarmas vs. Bank Victoria International |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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