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 Pensiunan, 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
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Bank is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Bank Cimb Niaga and Bank Tabungan Pensiunan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Tabungan Pensiunan 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 Pensiunan 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 1.39 times less risky than Bank Tabungan. The stock trades about -0.26 of its potential returns per unit of risk. The Bank Tabungan Pensiunan is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 226,000 in Bank Tabungan Pensiunan on August 29, 2024 and sell it today you would earn a total of 1,000.00 from holding Bank Tabungan Pensiunan or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Cimb Niaga vs. Bank Tabungan Pensiunan
Performance |
| Timeline |
| Bank Cimb Niaga |
| Bank Tabungan Pensiunan |
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 Danamon Indonesia | Bank Cimb vs. Bank Maybank Indonesia | Bank Cimb vs. Bank Pan Indonesia | Bank Cimb vs. Indosat Tbk |
| Bank Tabungan vs. Bank Permata Tbk | Bank Tabungan vs. Bank Danamon Indonesia | Bank Tabungan vs. Bank Jabar | Bank Tabungan vs. Bank Cimb Niaga |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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