Correlation Between Bank BRISyariah and Bank Capital
Can any of the company-specific risk be diversified away by investing in both Bank BRISyariah and Bank Capital 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 BRISyariah and Bank Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank BRISyariah Tbk and Bank Capital Indonesia, you can compare the effects of market volatilities on Bank BRISyariah and Bank Capital 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 BRISyariah with a short position of Bank Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank BRISyariah and Bank Capital.
Diversification Opportunities for Bank BRISyariah and Bank Capital
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Bank is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bank BRISyariah Tbk and Bank Capital Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Capital Indonesia and Bank BRISyariah 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 BRISyariah Tbk are associated (or correlated) with Bank Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Capital Indonesia has no effect on the direction of Bank BRISyariah i.e., Bank BRISyariah and Bank Capital go up and down completely randomly.
Pair Corralation between Bank BRISyariah and Bank Capital
Assuming the 90 days trading horizon Bank BRISyariah Tbk is expected to generate 2.29 times more return on investment than Bank Capital. However, Bank BRISyariah is 2.29 times more volatile than Bank Capital Indonesia. It trades about -0.02 of its potential returns per unit of risk. Bank Capital Indonesia is currently generating about -0.06 per unit of risk. If you would invest 296,000 in Bank BRISyariah Tbk on August 31, 2024 and sell it today you would lose (5,000) from holding Bank BRISyariah Tbk or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank BRISyariah Tbk vs. Bank Capital Indonesia
Performance |
| Timeline |
| Bank BRISyariah Tbk |
| Bank Capital Indonesia |
Bank BRISyariah and Bank Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank BRISyariah and Bank Capital
The main advantage of trading using opposite Bank BRISyariah and Bank Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank BRISyariah position performs unexpectedly, Bank Capital 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 Bank Capital will offset losses from the drop in Bank Capital's long position.| Bank BRISyariah vs. Aneka Tambang Persero | Bank BRISyariah vs. Sido Muncul PT | Bank BRISyariah vs. Indofood Cbp Sukses | Bank BRISyariah vs. Bank Tabungan Pensiunan |
| Bank Capital vs. Bank BRISyariah Tbk | Bank Capital vs. Ace Hardware Indonesia | Bank Capital vs. Merdeka Copper Gold | Bank Capital vs. Mitra Pinasthika Mustika |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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