Correlation Between Bank Bumi and Bank Ina
Can any of the company-specific risk be diversified away by investing in both Bank Bumi and Bank Ina 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 Bank Ina 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 Bank Ina Perdana, you can compare the effects of market volatilities on Bank Bumi and Bank Ina 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 Bank Ina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Bumi and Bank Ina.
Diversification Opportunities for Bank Bumi and Bank Ina
Significant diversification
The 3 months correlation between Bank and Bank is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Bank Bumi Arta and Bank Ina Perdana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Ina Perdana 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 Bank Ina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Ina Perdana has no effect on the direction of Bank Bumi i.e., Bank Bumi and Bank Ina go up and down completely randomly.
Pair Corralation between Bank Bumi and Bank Ina
Assuming the 90 days trading horizon Bank Bumi Arta is expected to under-perform the Bank Ina. In addition to that, Bank Bumi is 2.51 times more volatile than Bank Ina Perdana. It trades about -0.07 of its total potential returns per unit of risk. Bank Ina Perdana is currently generating about 0.04 per unit of volatility. If you would invest 401,000 in Bank Ina Perdana on August 28, 2024 and sell it today you would earn a total of 9,000 from holding Bank Ina Perdana or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Bumi Arta vs. Bank Ina Perdana
Performance |
| Timeline |
| Bank Bumi Arta |
| Bank Ina Perdana |
Bank Bumi and Bank Ina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Bumi and Bank Ina
The main advantage of trading using opposite Bank Bumi and Bank Ina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Bumi position performs unexpectedly, Bank Ina 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 Ina will offset losses from the drop in Bank Ina'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 |
| Bank Ina vs. Bk Harda Internasional | Bank Ina vs. Bank Yudha Bhakti | Bank Ina vs. Bank Sinarmas Tbk | Bank Ina vs. Bank Maspion 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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