Correlation Between Bank Cimb and Samudera Indonesia
Can any of the company-specific risk be diversified away by investing in both Bank Cimb and Samudera Indonesia 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 Samudera Indonesia 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 Samudera Indonesia Tbk, you can compare the effects of market volatilities on Bank Cimb and Samudera Indonesia 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 Samudera Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Cimb and Samudera Indonesia.
Diversification Opportunities for Bank Cimb and Samudera Indonesia
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bank and Samudera is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Bank Cimb Niaga and Samudera Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samudera Indonesia 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 Samudera Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samudera Indonesia Tbk has no effect on the direction of Bank Cimb i.e., Bank Cimb and Samudera Indonesia go up and down completely randomly.
Pair Corralation between Bank Cimb and Samudera Indonesia
Assuming the 90 days trading horizon Bank Cimb Niaga is expected to generate 0.69 times more return on investment than Samudera Indonesia. However, Bank Cimb Niaga is 1.44 times less risky than Samudera Indonesia. It trades about 0.24 of its potential returns per unit of risk. Samudera Indonesia Tbk is currently generating about 0.01 per unit of risk. If you would invest 167,000 in Bank Cimb Niaga on October 20, 2024 and sell it today you would earn a total of 8,000 from holding Bank Cimb Niaga or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Cimb Niaga vs. Samudera Indonesia Tbk
Performance |
| Timeline |
| Bank Cimb Niaga |
| Samudera Indonesia Tbk |
Bank Cimb and Samudera Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Cimb and Samudera Indonesia
The main advantage of trading using opposite Bank Cimb and Samudera Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Cimb position performs unexpectedly, Samudera Indonesia 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 Samudera Indonesia will offset losses from the drop in Samudera Indonesia'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 |
| Samudera Indonesia vs. PT Temas Tbk | Samudera Indonesia vs. Petrosea Tbk | Samudera Indonesia vs. Rig Tenders Tbk | Samudera Indonesia vs. Rukun Raharja Tbk |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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