Correlation Between Bank Cimb and Bank Bukopin
Can any of the company-specific risk be diversified away by investing in both Bank Cimb and Bank Bukopin 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 Bank Bukopin 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 Bank Bukopin Tbk, you can compare the effects of market volatilities on Bank Cimb and Bank Bukopin 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 Bank Bukopin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Cimb and Bank Bukopin.
Diversification Opportunities for Bank Cimb and Bank Bukopin
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Bank is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Bank Cimb Niaga and Bank Bukopin Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Bukopin 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 Bank Bukopin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Bukopin Tbk has no effect on the direction of Bank Cimb i.e., Bank Cimb and Bank Bukopin go up and down completely randomly.
Pair Corralation between Bank Cimb and Bank Bukopin
Assuming the 90 days trading horizon Bank Cimb Niaga is expected to generate 0.62 times more return on investment than Bank Bukopin. However, Bank Cimb Niaga is 1.62 times less risky than Bank Bukopin. It trades about 0.1 of its potential returns per unit of risk. Bank Bukopin Tbk is currently generating about -0.07 per unit of risk. If you would invest 93,520 in Bank Cimb Niaga on August 27, 2024 and sell it today you would earn a total of 82,980 from holding Bank Cimb Niaga or generate 88.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Cimb Niaga vs. Bank Bukopin Tbk
Performance |
| Timeline |
| Bank Cimb Niaga |
| Bank Bukopin Tbk |
Bank Cimb and Bank Bukopin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Cimb and Bank Bukopin
The main advantage of trading using opposite Bank Cimb and Bank Bukopin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Cimb position performs unexpectedly, Bank Bukopin 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 Bukopin will offset losses from the drop in Bank Bukopin'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 |
| Bank Bukopin vs. Bank Danamon Indonesia | Bank Bukopin vs. Bank Cimb Niaga | Bank Bukopin vs. Bank Tabungan Negara | Bank Bukopin vs. Bank Jabar |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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