Correlation Between Bank Cimb and Jasa Marga
Can any of the company-specific risk be diversified away by investing in both Bank Cimb and Jasa Marga 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 Jasa Marga 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 Jasa Marga Tbk, you can compare the effects of market volatilities on Bank Cimb and Jasa Marga 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 Jasa Marga. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Cimb and Jasa Marga.
Diversification Opportunities for Bank Cimb and Jasa Marga
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Jasa is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Bank Cimb Niaga and Jasa Marga Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jasa Marga 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 Jasa Marga. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jasa Marga Tbk has no effect on the direction of Bank Cimb i.e., Bank Cimb and Jasa Marga go up and down completely randomly.
Pair Corralation between Bank Cimb and Jasa Marga
Assuming the 90 days trading horizon Bank Cimb is expected to generate 1.28 times less return on investment than Jasa Marga. But when comparing it to its historical volatility, Bank Cimb Niaga is 1.65 times less risky than Jasa Marga. It trades about 0.09 of its potential returns per unit of risk. Jasa Marga Tbk is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 433,000 in Jasa Marga Tbk on October 26, 2024 and sell it today you would earn a total of 9,000 from holding Jasa Marga Tbk or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Cimb Niaga vs. Jasa Marga Tbk
Performance |
| Timeline |
| Bank Cimb Niaga |
| Jasa Marga Tbk |
Bank Cimb and Jasa Marga Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Cimb and Jasa Marga
The main advantage of trading using opposite Bank Cimb and Jasa Marga positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Cimb position performs unexpectedly, Jasa Marga 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 Jasa Marga will offset losses from the drop in Jasa Marga'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 |
| Jasa Marga vs. Semen Indonesia Persero | Jasa Marga vs. Wijaya Karya Beton | Jasa Marga vs. Perusahaan Gas Negara | Jasa Marga vs. PT Indofood Sukses |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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