Correlation Between Bank Cimb and Fimperkasa Utama
Can any of the company-specific risk be diversified away by investing in both Bank Cimb and Fimperkasa Utama 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 Fimperkasa Utama 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 Fimperkasa Utama Tbk, you can compare the effects of market volatilities on Bank Cimb and Fimperkasa Utama 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 Fimperkasa Utama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Cimb and Fimperkasa Utama.
Diversification Opportunities for Bank Cimb and Fimperkasa Utama
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Fimperkasa is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bank Cimb Niaga and Fimperkasa Utama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fimperkasa Utama 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 Fimperkasa Utama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fimperkasa Utama Tbk has no effect on the direction of Bank Cimb i.e., Bank Cimb and Fimperkasa Utama go up and down completely randomly.
Pair Corralation between Bank Cimb and Fimperkasa Utama
Assuming the 90 days trading horizon Bank Cimb Niaga is expected to generate 0.39 times more return on investment than Fimperkasa Utama. However, Bank Cimb Niaga is 2.59 times less risky than Fimperkasa Utama. It trades about 0.11 of its potential returns per unit of risk. Fimperkasa Utama Tbk is currently generating about -0.01 per unit of risk. If you would invest 89,639 in Bank Cimb Niaga on August 26, 2024 and sell it today you would earn a total of 86,861 from holding Bank Cimb Niaga or generate 96.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Cimb Niaga vs. Fimperkasa Utama Tbk
Performance |
| Timeline |
| Bank Cimb Niaga |
| Fimperkasa Utama Tbk |
Bank Cimb and Fimperkasa Utama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Cimb and Fimperkasa Utama
The main advantage of trading using opposite Bank Cimb and Fimperkasa Utama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Cimb position performs unexpectedly, Fimperkasa Utama 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 Fimperkasa Utama will offset losses from the drop in Fimperkasa Utama's long position.| Bank Cimb vs. Paninvest Tbk | Bank Cimb vs. Panin Sekuritas Tbk | Bank Cimb vs. Wahana Ottomitra Multiartha | Bank Cimb vs. Lenox Pasifik Investama |
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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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