Correlation Between Bank Permata and Sumber Alfaria
Can any of the company-specific risk be diversified away by investing in both Bank Permata and Sumber Alfaria 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 Sumber Alfaria 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 Sumber Alfaria Trijaya, you can compare the effects of market volatilities on Bank Permata and Sumber Alfaria 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 Sumber Alfaria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Permata and Sumber Alfaria.
Diversification Opportunities for Bank Permata and Sumber Alfaria
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and Sumber is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Bank Permata Tbk and Sumber Alfaria Trijaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumber Alfaria Trijaya 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 Sumber Alfaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumber Alfaria Trijaya has no effect on the direction of Bank Permata i.e., Bank Permata and Sumber Alfaria go up and down completely randomly.
Pair Corralation between Bank Permata and Sumber Alfaria
Assuming the 90 days trading horizon Bank Permata Tbk is expected to generate 0.96 times more return on investment than Sumber Alfaria. However, Bank Permata Tbk is 1.04 times less risky than Sumber Alfaria. It trades about 0.07 of its potential returns per unit of risk. Sumber Alfaria Trijaya is currently generating about -0.15 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. Sumber Alfaria Trijaya
Performance |
| Timeline |
| Bank Permata Tbk |
| Sumber Alfaria Trijaya |
Bank Permata and Sumber Alfaria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Permata and Sumber Alfaria
The main advantage of trading using opposite Bank Permata and Sumber Alfaria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Permata position performs unexpectedly, Sumber Alfaria 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 Sumber Alfaria will offset losses from the drop in Sumber Alfaria'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 |
| Sumber Alfaria vs. Elang Mahkota Teknologi | Sumber Alfaria vs. Ace Hardware Indonesia | Sumber Alfaria vs. BFI Finance Indonesia | Sumber Alfaria vs. Tower Bersama Infrastructure |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |