Correlation Between Bank BRISyariah and Capital Financial
Can any of the company-specific risk be diversified away by investing in both Bank BRISyariah and Capital Financial 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 Capital Financial 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 Capital Financial Indonesia, you can compare the effects of market volatilities on Bank BRISyariah and Capital Financial 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 Capital Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank BRISyariah and Capital Financial.
Diversification Opportunities for Bank BRISyariah and Capital Financial
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Capital is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bank BRISyariah Tbk and Capital Financial Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Financial 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 Capital Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Financial has no effect on the direction of Bank BRISyariah i.e., Bank BRISyariah and Capital Financial go up and down completely randomly.
Pair Corralation between Bank BRISyariah and Capital Financial
Assuming the 90 days trading horizon Bank BRISyariah Tbk is expected to generate 0.92 times more return on investment than Capital Financial. However, Bank BRISyariah Tbk is 1.09 times less risky than Capital Financial. It trades about 0.08 of its potential returns per unit of risk. Capital Financial Indonesia is currently generating about 0.02 per unit of risk. If you would invest 261,000 in Bank BRISyariah Tbk on September 2, 2024 and sell it today you would earn a total of 29,000 from holding Bank BRISyariah Tbk or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank BRISyariah Tbk vs. Capital Financial Indonesia
Performance |
| Timeline |
| Bank BRISyariah Tbk |
| Capital Financial |
Bank BRISyariah and Capital Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank BRISyariah and Capital Financial
The main advantage of trading using opposite Bank BRISyariah and Capital Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank BRISyariah position performs unexpectedly, Capital Financial 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 Capital Financial will offset losses from the drop in Capital Financial's long position.| Bank BRISyariah vs. Ace Hardware Indonesia | Bank BRISyariah vs. Merdeka Copper Gold | Bank BRISyariah vs. Mitra Pinasthika Mustika | Bank BRISyariah vs. Jakarta Int Hotels |
| Capital Financial vs. Ace Hardware Indonesia | Capital Financial vs. Merdeka Copper Gold | Capital Financial vs. Mitra Pinasthika Mustika | Capital Financial vs. Jakarta Int Hotels |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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