Correlation Between Bakrie Brothers and Bank Danamon
Can any of the company-specific risk be diversified away by investing in both Bakrie Brothers and Bank Danamon 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 Bakrie Brothers and Bank Danamon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bakrie Brothers Tbk and Bank Danamon Indonesia, you can compare the effects of market volatilities on Bakrie Brothers and Bank Danamon 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 Bakrie Brothers with a short position of Bank Danamon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakrie Brothers and Bank Danamon.
Diversification Opportunities for Bakrie Brothers and Bank Danamon
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bakrie and Bank is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bakrie Brothers Tbk and Bank Danamon Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Danamon Indonesia and Bakrie Brothers 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 Bakrie Brothers Tbk are associated (or correlated) with Bank Danamon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Danamon Indonesia has no effect on the direction of Bakrie Brothers i.e., Bakrie Brothers and Bank Danamon go up and down completely randomly.
Pair Corralation between Bakrie Brothers and Bank Danamon
Assuming the 90 days trading horizon Bakrie Brothers Tbk is expected to generate 7.14 times more return on investment than Bank Danamon. However, Bakrie Brothers is 7.14 times more volatile than Bank Danamon Indonesia. It trades about 0.02 of its potential returns per unit of risk. Bank Danamon Indonesia is currently generating about -0.14 per unit of risk. If you would invest 4,700 in Bakrie Brothers Tbk on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Bakrie Brothers Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bakrie Brothers Tbk vs. Bank Danamon Indonesia
Performance |
| Timeline |
| Bakrie Brothers Tbk |
| Bank Danamon Indonesia |
Bakrie Brothers and Bank Danamon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakrie Brothers and Bank Danamon
The main advantage of trading using opposite Bakrie Brothers and Bank Danamon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakrie Brothers position performs unexpectedly, Bank Danamon 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 Danamon will offset losses from the drop in Bank Danamon's long position.| Bakrie Brothers vs. Bakrieland Development Tbk | Bakrie Brothers vs. Bakrie Sumatera Plantations | Bakrie Brothers vs. Energi Mega Persada | Bakrie Brothers vs. Darma Henwa Tbk |
| Bank Danamon vs. Bank BRISyariah Tbk | Bank Danamon vs. Ace Hardware Indonesia | Bank Danamon vs. Merdeka Copper Gold | Bank Danamon vs. Mitra Pinasthika Mustika |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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