Correlation Between Bank Permata and Sumber Tani
Can any of the company-specific risk be diversified away by investing in both Bank Permata and Sumber Tani 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 Tani 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 Tani Agung, you can compare the effects of market volatilities on Bank Permata and Sumber Tani 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 Tani. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Permata and Sumber Tani.
Diversification Opportunities for Bank Permata and Sumber Tani
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Sumber is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bank Permata Tbk and Sumber Tani Agung in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumber Tani Agung 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 Tani. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumber Tani Agung has no effect on the direction of Bank Permata i.e., Bank Permata and Sumber Tani go up and down completely randomly.
Pair Corralation between Bank Permata and Sumber Tani
Assuming the 90 days trading horizon Bank Permata Tbk is expected to generate 2.78 times more return on investment than Sumber Tani. However, Bank Permata is 2.78 times more volatile than Sumber Tani Agung. It trades about 0.03 of its potential returns per unit of risk. Sumber Tani Agung is currently generating about 0.03 per unit of risk. If you would invest 90,104 in Bank Permata Tbk on August 27, 2024 and sell it today you would earn a total of 10,896 from holding Bank Permata Tbk or generate 12.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Permata Tbk vs. Sumber Tani Agung
Performance |
| Timeline |
| Bank Permata Tbk |
| Sumber Tani Agung |
Bank Permata and Sumber Tani Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Permata and Sumber Tani
The main advantage of trading using opposite Bank Permata and Sumber Tani positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Permata position performs unexpectedly, Sumber Tani 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 Tani will offset losses from the drop in Sumber Tani's long position.| Bank Permata vs. Paninvest Tbk | Bank Permata vs. Wahana Ottomitra Multiartha | Bank Permata vs. Lenox Pasifik Investama |
| Sumber Tani vs. Dharma Satya Nusantara | Sumber Tani vs. Saratoga Investama Sedaya | Sumber Tani vs. Surya Esa Perkasa | Sumber Tani vs. Elang Mahkota Teknologi |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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