Correlation Between Bakrie Brothers and Bank Cimb
Can any of the company-specific risk be diversified away by investing in both Bakrie Brothers and Bank Cimb 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 Cimb 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 Cimb Niaga, you can compare the effects of market volatilities on Bakrie Brothers and Bank Cimb 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 Cimb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakrie Brothers and Bank Cimb.
Diversification Opportunities for Bakrie Brothers and Bank Cimb
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bakrie and Bank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Bakrie Brothers Tbk and Bank Cimb Niaga in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Cimb Niaga 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 Cimb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Cimb Niaga has no effect on the direction of Bakrie Brothers i.e., Bakrie Brothers and Bank Cimb go up and down completely randomly.
Pair Corralation between Bakrie Brothers and Bank Cimb
If you would invest (100.00) in Bank Cimb Niaga on August 29, 2024 and sell it today you would earn a total of 100.00 from holding Bank Cimb Niaga or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bakrie Brothers Tbk vs. Bank Cimb Niaga
Performance |
| Timeline |
| Bakrie Brothers Tbk |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Bank Cimb Niaga |
Bakrie Brothers and Bank Cimb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakrie Brothers and Bank Cimb
The main advantage of trading using opposite Bakrie Brothers and Bank Cimb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakrie Brothers position performs unexpectedly, Bank Cimb 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 Cimb will offset losses from the drop in Bank Cimb's long position.The idea behind Bakrie Brothers Tbk and Bank Cimb Niaga pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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