Correlation Between Bank Cimb and Alkindo Naratama
Can any of the company-specific risk be diversified away by investing in both Bank Cimb and Alkindo Naratama 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 Alkindo Naratama 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 Alkindo Naratama Tbk, you can compare the effects of market volatilities on Bank Cimb and Alkindo Naratama 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 Alkindo Naratama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Cimb and Alkindo Naratama.
Diversification Opportunities for Bank Cimb and Alkindo Naratama
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and Alkindo is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bank Cimb Niaga and Alkindo Naratama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkindo Naratama Tbk 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 Alkindo Naratama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkindo Naratama Tbk has no effect on the direction of Bank Cimb i.e., Bank Cimb and Alkindo Naratama go up and down completely randomly.
Pair Corralation between Bank Cimb and Alkindo Naratama
Assuming the 90 days trading horizon Bank Cimb Niaga is expected to under-perform the Alkindo Naratama. But the stock apears to be less risky and, when comparing its historical volatility, Bank Cimb Niaga is 2.72 times less risky than Alkindo Naratama. The stock trades about -0.08 of its potential returns per unit of risk. The Alkindo Naratama Tbk is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 40,800 in Alkindo Naratama Tbk on August 28, 2024 and sell it today you would earn a total of 17,700 from holding Alkindo Naratama Tbk or generate 43.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Cimb Niaga vs. Alkindo Naratama Tbk
Performance |
| Timeline |
| Bank Cimb Niaga |
| Alkindo Naratama Tbk |
Bank Cimb and Alkindo Naratama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Cimb and Alkindo Naratama
The main advantage of trading using opposite Bank Cimb and Alkindo Naratama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Cimb position performs unexpectedly, Alkindo Naratama 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 Alkindo Naratama will offset losses from the drop in Alkindo Naratama'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 |
| Alkindo Naratama vs. Kedaung Indah Can | Alkindo Naratama vs. Langgeng Makmur Industri | Alkindo Naratama vs. Kabelindo Murni Tbk | Alkindo Naratama vs. Mustika Ratu Tbk |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |