Correlation Between Bank Bumi and Bank Victoria
Can any of the company-specific risk be diversified away by investing in both Bank Bumi and Bank Victoria 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 Victoria 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 Victoria International, you can compare the effects of market volatilities on Bank Bumi and Bank Victoria 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 Victoria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Bumi and Bank Victoria.
Diversification Opportunities for Bank Bumi and Bank Victoria
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Bank is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bank Bumi Arta and Bank Victoria International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Victoria Intern 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 Victoria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Victoria Intern has no effect on the direction of Bank Bumi i.e., Bank Bumi and Bank Victoria go up and down completely randomly.
Pair Corralation between Bank Bumi and Bank Victoria
Assuming the 90 days trading horizon Bank Bumi Arta is expected to under-perform the Bank Victoria. But the stock apears to be less risky and, when comparing its historical volatility, Bank Bumi Arta is 1.25 times less risky than Bank Victoria. The stock trades about -0.01 of its potential returns per unit of risk. The Bank Victoria International is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 9,100 in Bank Victoria International on November 5, 2024 and sell it today you would earn a total of 200.00 from holding Bank Victoria International or generate 2.2% 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 Victoria International
Performance |
| Timeline |
| Bank Bumi Arta |
| Bank Victoria Intern |
Bank Bumi and Bank Victoria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Bumi and Bank Victoria
The main advantage of trading using opposite Bank Bumi and Bank Victoria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Bumi position performs unexpectedly, Bank Victoria 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 Victoria will offset losses from the drop in Bank Victoria'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 Victoria vs. Bank Qnb Indonesia | Bank Victoria vs. Bank Mnc Internasional | Bank Victoria vs. Bank Bumi Arta | Bank Victoria vs. Bank Capital 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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