Correlation Between Bank Cimb and Bank Tabungan
Can any of the company-specific risk be diversified away by investing in both Bank Cimb and Bank Tabungan 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 Tabungan 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 Tabungan Negara, you can compare the effects of market volatilities on Bank Cimb and Bank Tabungan 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 Tabungan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Cimb and Bank Tabungan.
Diversification Opportunities for Bank Cimb and Bank Tabungan
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Bank is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Bank Cimb Niaga and Bank Tabungan Negara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Tabungan Negara 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 Tabungan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Tabungan Negara has no effect on the direction of Bank Cimb i.e., Bank Cimb and Bank Tabungan go up and down completely randomly.
Pair Corralation between Bank Cimb and Bank Tabungan
Assuming the 90 days trading horizon Bank Cimb Niaga is expected to under-perform the Bank Tabungan. But the stock apears to be less risky and, when comparing its historical volatility, Bank Cimb Niaga is 1.54 times less risky than Bank Tabungan. The stock trades about -0.01 of its potential returns per unit of risk. The Bank Tabungan Negara is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 130,066 in Bank Tabungan Negara on September 1, 2024 and sell it today you would lose (1,566) from holding Bank Tabungan Negara or give up 1.2% of portfolio value 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 Tabungan Negara
Performance |
| Timeline |
| Bank Cimb Niaga |
| Bank Tabungan Negara |
Bank Cimb and Bank Tabungan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Cimb and Bank Tabungan
The main advantage of trading using opposite Bank Cimb and Bank Tabungan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Cimb position performs unexpectedly, Bank Tabungan 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 Tabungan will offset losses from the drop in Bank Tabungan's long position.| Bank Cimb vs. Bank BRISyariah Tbk | Bank Cimb vs. Ace Hardware Indonesia | Bank Cimb vs. Merdeka Copper Gold | Bank Cimb vs. Mitra Pinasthika Mustika |
| Bank Tabungan vs. Bank BRISyariah Tbk | Bank Tabungan vs. Ace Hardware Indonesia | Bank Tabungan vs. Merdeka Copper Gold | Bank Tabungan 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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