Correlation Between Bank Bumi and Asuransi Harta
Can any of the company-specific risk be diversified away by investing in both Bank Bumi and Asuransi Harta 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 Bumi and Asuransi Harta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Bumi Arta and Asuransi Harta Aman, you can compare the effects of market volatilities on Bank Bumi and Asuransi Harta 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 Bumi with a short position of Asuransi Harta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Bumi and Asuransi Harta.
Diversification Opportunities for Bank Bumi and Asuransi Harta
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Asuransi is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bank Bumi Arta and Asuransi Harta Aman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Harta Aman and Bank Bumi 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 Bumi Arta are associated (or correlated) with Asuransi Harta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Harta Aman has no effect on the direction of Bank Bumi i.e., Bank Bumi and Asuransi Harta go up and down completely randomly.
Pair Corralation between Bank Bumi and Asuransi Harta
Assuming the 90 days trading horizon Bank Bumi Arta is expected to generate 0.77 times more return on investment than Asuransi Harta. However, Bank Bumi Arta is 1.29 times less risky than Asuransi Harta. It trades about 0.06 of its potential returns per unit of risk. Asuransi Harta Aman is currently generating about 0.01 per unit of risk. If you would invest 61,000 in Bank Bumi Arta on August 27, 2024 and sell it today you would earn a total of 10,500 from holding Bank Bumi Arta or generate 17.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Bumi Arta vs. Asuransi Harta Aman
Performance |
| Timeline |
| Bank Bumi Arta |
| Asuransi Harta Aman |
Bank Bumi and Asuransi Harta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Bumi and Asuransi Harta
The main advantage of trading using opposite Bank Bumi and Asuransi Harta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Bumi position performs unexpectedly, Asuransi Harta 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 Asuransi Harta will offset losses from the drop in Asuransi Harta's long position.| Bank Bumi vs. Bank Capital Indonesia | Bank Bumi vs. Bank Mnc Internasional | Bank Bumi vs. Bank Victoria International | Bank Bumi vs. Bank Qnb Indonesia |
| Asuransi Harta vs. Asuransi Bintang Tbk | Asuransi Harta vs. Asuransi Bina Dana | Asuransi Harta vs. Asuransi Dayin Mitra | Asuransi Harta vs. Asuransi Jasa Tania |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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