Correlation Between Bank Cimb and Bakrie Brothers
Can any of the company-specific risk be diversified away by investing in both Bank Cimb and Bakrie Brothers 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 Bakrie Brothers 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 Bakrie Brothers Tbk, you can compare the effects of market volatilities on Bank Cimb and Bakrie Brothers 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 Bakrie Brothers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Cimb and Bakrie Brothers.
Diversification Opportunities for Bank Cimb and Bakrie Brothers
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Bakrie is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bank Cimb Niaga and Bakrie Brothers Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakrie Brothers 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 Bakrie Brothers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bakrie Brothers Tbk has no effect on the direction of Bank Cimb i.e., Bank Cimb and Bakrie Brothers go up and down completely randomly.
Pair Corralation between Bank Cimb and Bakrie Brothers
Assuming the 90 days trading horizon Bank Cimb Niaga is expected to under-perform the Bakrie Brothers. But the stock apears to be less risky and, when comparing its historical volatility, Bank Cimb Niaga is 4.62 times less risky than Bakrie Brothers. The stock trades about -0.29 of its potential returns per unit of risk. The Bakrie Brothers Tbk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,700 in Bakrie Brothers Tbk on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Bakrie Brothers Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank Cimb Niaga vs. Bakrie Brothers Tbk
Performance |
| Timeline |
| Bank Cimb Niaga |
| Bakrie Brothers Tbk |
Bank Cimb and Bakrie Brothers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Cimb and Bakrie Brothers
The main advantage of trading using opposite Bank Cimb and Bakrie Brothers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Cimb position performs unexpectedly, Bakrie Brothers 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 Bakrie Brothers will offset losses from the drop in Bakrie Brothers' 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 |
| Bakrie Brothers vs. Bakrieland Development Tbk | Bakrie Brothers vs. Bakrie Sumatera Plantations | Bakrie Brothers vs. Energi Mega Persada | Bakrie Brothers vs. Darma Henwa 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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