Correlation Between Bank Permata and Adira Dinamika
Can any of the company-specific risk be diversified away by investing in both Bank Permata and Adira Dinamika 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 Permata and Adira Dinamika into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Permata Tbk and Adira Dinamika Multi, you can compare the effects of market volatilities on Bank Permata and Adira Dinamika 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 Permata with a short position of Adira Dinamika. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Permata and Adira Dinamika.
Diversification Opportunities for Bank Permata and Adira Dinamika
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and Adira is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bank Permata Tbk and Adira Dinamika Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adira Dinamika Multi and Bank Permata 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 Permata Tbk are associated (or correlated) with Adira Dinamika. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adira Dinamika Multi has no effect on the direction of Bank Permata i.e., Bank Permata and Adira Dinamika go up and down completely randomly.
Pair Corralation between Bank Permata and Adira Dinamika
Assuming the 90 days trading horizon Bank Permata Tbk is expected to generate 2.75 times more return on investment than Adira Dinamika. However, Bank Permata is 2.75 times more volatile than Adira Dinamika Multi. It trades about 0.07 of its potential returns per unit of risk. Adira Dinamika Multi is currently generating about -0.23 per unit of risk. If you would invest 120,000 in Bank Permata Tbk on October 26, 2024 and sell it today you would earn a total of 9,500 from holding Bank Permata Tbk or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Permata Tbk vs. Adira Dinamika Multi
Performance |
| Timeline |
| Bank Permata Tbk |
| Adira Dinamika Multi |
Bank Permata and Adira Dinamika Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Permata and Adira Dinamika
The main advantage of trading using opposite Bank Permata and Adira Dinamika positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Permata position performs unexpectedly, Adira Dinamika 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 Adira Dinamika will offset losses from the drop in Adira Dinamika's long position.| Bank Permata vs. Bank Cimb Niaga | Bank Permata vs. Bank Maybank Indonesia | Bank Permata vs. Bank Danamon Indonesia | Bank Permata vs. Bank Pan Indonesia |
| Adira Dinamika vs. BFI Finance Indonesia | Adira Dinamika vs. Clipan Finance Indonesia | Adira Dinamika vs. Astra Otoparts Tbk | Adira Dinamika vs. Bank Danamon 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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