Correlation Between Bank Cimb and Bank Jabar
Can any of the company-specific risk be diversified away by investing in both Bank Cimb and Bank Jabar 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 Jabar 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 Jabar, you can compare the effects of market volatilities on Bank Cimb and Bank Jabar 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 Jabar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Cimb and Bank Jabar.
Diversification Opportunities for Bank Cimb and Bank Jabar
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Bank is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bank Cimb Niaga and Bank Jabar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Jabar 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 Jabar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Jabar has no effect on the direction of Bank Cimb i.e., Bank Cimb and Bank Jabar go up and down completely randomly.
Pair Corralation between Bank Cimb and Bank Jabar
Assuming the 90 days trading horizon Bank Cimb Niaga is expected to generate 1.62 times more return on investment than Bank Jabar. However, Bank Cimb is 1.62 times more volatile than Bank Jabar. It trades about -0.01 of its potential returns per unit of risk. Bank Jabar is currently generating about -0.09 per unit of risk. If you would invest 183,918 in Bank Cimb Niaga on September 1, 2024 and sell it today you would lose (8,418) from holding Bank Cimb Niaga or give up 4.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.44% |
| Values | Daily Returns |
Bank Cimb Niaga vs. Bank Jabar
Performance |
| Timeline |
| Bank Cimb Niaga |
| Bank Jabar |
Bank Cimb and Bank Jabar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Cimb and Bank Jabar
The main advantage of trading using opposite Bank Cimb and Bank Jabar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Cimb position performs unexpectedly, Bank Jabar 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 Jabar will offset losses from the drop in Bank Jabar'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 Jabar vs. Bank Pembangunan Timur | Bank Jabar vs. Bank Tabungan Negara | Bank Jabar vs. Bank Danamon Indonesia | Bank Jabar vs. Bumi Serpong Damai |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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