Correlation Between Bank Cimb and Maming Enam
Can any of the company-specific risk be diversified away by investing in both Bank Cimb and Maming Enam 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 Cimb and Maming Enam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Cimb Niaga and Maming Enam Sembilan, you can compare the effects of market volatilities on Bank Cimb and Maming Enam 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 Cimb with a short position of Maming Enam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Cimb and Maming Enam.
Diversification Opportunities for Bank Cimb and Maming Enam
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Maming is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Bank Cimb Niaga and Maming Enam Sembilan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maming Enam Sembilan and Bank Cimb 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 Cimb Niaga are associated (or correlated) with Maming Enam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maming Enam Sembilan has no effect on the direction of Bank Cimb i.e., Bank Cimb and Maming Enam go up and down completely randomly.
Pair Corralation between Bank Cimb and Maming Enam
Assuming the 90 days trading horizon Bank Cimb Niaga is expected to under-perform the Maming Enam. But the stock apears to be less risky and, when comparing its historical volatility, Bank Cimb Niaga is 5.37 times less risky than Maming Enam. The stock trades about 0.0 of its potential returns per unit of risk. The Maming Enam Sembilan is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 16,300 in Maming Enam Sembilan on November 4, 2024 and sell it today you would earn a total of 3,900 from holding Maming Enam Sembilan or generate 23.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Cimb Niaga vs. Maming Enam Sembilan
Performance |
| Timeline |
| Bank Cimb Niaga |
| Maming Enam Sembilan |
Bank Cimb and Maming Enam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Cimb and Maming Enam
The main advantage of trading using opposite Bank Cimb and Maming Enam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Cimb position performs unexpectedly, Maming Enam 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 Maming Enam will offset losses from the drop in Maming Enam's long position.| Bank Cimb vs. Bank Danamon Indonesia | Bank Cimb vs. Bank Maybank Indonesia | Bank Cimb vs. Bank Pan Indonesia | Bank Cimb vs. Indosat Tbk |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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