Correlation Between Bank Cimb and Bank Pan
Can any of the company-specific risk be diversified away by investing in both Bank Cimb and Bank Pan 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 Pan 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 Pan Indonesia, you can compare the effects of market volatilities on Bank Cimb and Bank Pan 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 Pan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Cimb and Bank Pan.
Diversification Opportunities for Bank Cimb and Bank Pan
Excellent diversification
The 3 months correlation between Bank and Bank is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bank Cimb Niaga and Bank Pan Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Pan Indonesia 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 Pan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Pan Indonesia has no effect on the direction of Bank Cimb i.e., Bank Cimb and Bank Pan go up and down completely randomly.
Pair Corralation between Bank Cimb and Bank Pan
Assuming the 90 days trading horizon Bank Cimb Niaga is expected to generate 0.49 times more return on investment than Bank Pan. However, Bank Cimb Niaga is 2.03 times less risky than Bank Pan. It trades about -0.26 of its potential returns per unit of risk. Bank Pan Indonesia is currently generating about -0.16 per unit of risk. If you would invest 188,000 in Bank Cimb Niaga on August 29, 2024 and sell it today you would lose (11,000) from holding Bank Cimb Niaga or give up 5.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Cimb Niaga vs. Bank Pan Indonesia
Performance |
| Timeline |
| Bank Cimb Niaga |
| Bank Pan Indonesia |
Bank Cimb and Bank Pan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Cimb and Bank Pan
The main advantage of trading using opposite Bank Cimb and Bank Pan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Cimb position performs unexpectedly, Bank Pan 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 Pan will offset losses from the drop in Bank Pan'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 Pan vs. Bank Danamon Indonesia | Bank Pan vs. Bank Cimb Niaga | Bank Pan vs. Panin Financial Tbk | Bank Pan vs. Bank Maybank Indonesia |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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