Correlation Between Bank Cimb and Samindo Resources
Can any of the company-specific risk be diversified away by investing in both Bank Cimb and Samindo Resources 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 Samindo Resources 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 Samindo Resources Tbk, you can compare the effects of market volatilities on Bank Cimb and Samindo Resources 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 Samindo Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Cimb and Samindo Resources.
Diversification Opportunities for Bank Cimb and Samindo Resources
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Samindo is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bank Cimb Niaga and Samindo Resources Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samindo Resources 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 Samindo Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samindo Resources Tbk has no effect on the direction of Bank Cimb i.e., Bank Cimb and Samindo Resources go up and down completely randomly.
Pair Corralation between Bank Cimb and Samindo Resources
Assuming the 90 days trading horizon Bank Cimb Niaga is expected to under-perform the Samindo Resources. But the stock apears to be less risky and, when comparing its historical volatility, Bank Cimb Niaga is 2.71 times less risky than Samindo Resources. The stock trades about -0.26 of its potential returns per unit of risk. The Samindo Resources Tbk is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 131,000 in Samindo Resources Tbk on August 29, 2024 and sell it today you would earn a total of 29,000 from holding Samindo Resources Tbk or generate 22.14% 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. Samindo Resources Tbk
Performance |
| Timeline |
| Bank Cimb Niaga |
| Samindo Resources Tbk |
Bank Cimb and Samindo Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Cimb and Samindo Resources
The main advantage of trading using opposite Bank Cimb and Samindo Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Cimb position performs unexpectedly, Samindo Resources 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 Samindo Resources will offset losses from the drop in Samindo Resources' 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 |
| Samindo Resources vs. Resource Alam Indonesia | Samindo Resources vs. Petrosea Tbk | Samindo Resources vs. Kmi Wire And | Samindo Resources vs. Mitrabara Adiperdana PT |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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