Correlation Between Bank Permata and Solusi Sinergi
Can any of the company-specific risk be diversified away by investing in both Bank Permata and Solusi Sinergi 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 Solusi Sinergi 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 Solusi Sinergi Digital, you can compare the effects of market volatilities on Bank Permata and Solusi Sinergi 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 Solusi Sinergi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Permata and Solusi Sinergi.
Diversification Opportunities for Bank Permata and Solusi Sinergi
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Solusi is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bank Permata Tbk and Solusi Sinergi Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solusi Sinergi Digital 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 Solusi Sinergi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solusi Sinergi Digital has no effect on the direction of Bank Permata i.e., Bank Permata and Solusi Sinergi go up and down completely randomly.
Pair Corralation between Bank Permata and Solusi Sinergi
Assuming the 90 days trading horizon Bank Permata is expected to generate 5.19 times less return on investment than Solusi Sinergi. But when comparing it to its historical volatility, Bank Permata Tbk is 1.17 times less risky than Solusi Sinergi. It trades about 0.02 of its potential returns per unit of risk. Solusi Sinergi Digital is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 18,880 in Solusi Sinergi Digital on September 12, 2024 and sell it today you would earn a total of 22,920 from holding Solusi Sinergi Digital or generate 121.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.69% |
| Values | Daily Returns |
Bank Permata Tbk vs. Solusi Sinergi Digital
Performance |
| Timeline |
| Bank Permata Tbk |
| Solusi Sinergi Digital |
Bank Permata and Solusi Sinergi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Permata and Solusi Sinergi
The main advantage of trading using opposite Bank Permata and Solusi Sinergi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Permata position performs unexpectedly, Solusi Sinergi 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 Solusi Sinergi will offset losses from the drop in Solusi Sinergi'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 |
| Solusi Sinergi vs. DCI Indonesia Tbk | Solusi Sinergi vs. Digital Mediatama Maxima | Solusi Sinergi vs. Multipolar Technology Tbk | Solusi Sinergi vs. Bank Net 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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