Correlation Between Bank BRISyariah and Bumi Teknokultura
Can any of the company-specific risk be diversified away by investing in both Bank BRISyariah and Bumi Teknokultura 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 Bumi Teknokultura 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 Bumi Teknokultura Unggul, you can compare the effects of market volatilities on Bank BRISyariah and Bumi Teknokultura 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 Bumi Teknokultura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank BRISyariah and Bumi Teknokultura.
Diversification Opportunities for Bank BRISyariah and Bumi Teknokultura
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Bumi is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Bank BRISyariah Tbk and Bumi Teknokultura Unggul in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bumi Teknokultura Unggul 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 Bumi Teknokultura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bumi Teknokultura Unggul has no effect on the direction of Bank BRISyariah i.e., Bank BRISyariah and Bumi Teknokultura go up and down completely randomly.
Pair Corralation between Bank BRISyariah and Bumi Teknokultura
Assuming the 90 days trading horizon Bank BRISyariah is expected to generate 2.92 times less return on investment than Bumi Teknokultura. But when comparing it to its historical volatility, Bank BRISyariah Tbk is 6.38 times less risky than Bumi Teknokultura. It trades about 0.07 of its potential returns per unit of risk. Bumi Teknokultura Unggul is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,000 in Bumi Teknokultura Unggul on November 19, 2024 and sell it today you would lose (4,500) from holding Bumi Teknokultura Unggul or give up 90.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Bank BRISyariah Tbk vs. Bumi Teknokultura Unggul
Performance |
| Timeline |
| Bank BRISyariah Tbk |
| Bumi Teknokultura Unggul |
Bank BRISyariah and Bumi Teknokultura Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank BRISyariah and Bumi Teknokultura
The main advantage of trading using opposite Bank BRISyariah and Bumi Teknokultura positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank BRISyariah position performs unexpectedly, Bumi Teknokultura 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 Bumi Teknokultura will offset losses from the drop in Bumi Teknokultura'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 |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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