Correlation Between Bank BRISyariah and Aman Agrindo
Can any of the company-specific risk be diversified away by investing in both Bank BRISyariah and Aman Agrindo 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 Aman Agrindo 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 Aman Agrindo, you can compare the effects of market volatilities on Bank BRISyariah and Aman Agrindo 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 Aman Agrindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank BRISyariah and Aman Agrindo.
Diversification Opportunities for Bank BRISyariah and Aman Agrindo
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Aman is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bank BRISyariah Tbk and Aman Agrindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aman Agrindo 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 Aman Agrindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aman Agrindo has no effect on the direction of Bank BRISyariah i.e., Bank BRISyariah and Aman Agrindo go up and down completely randomly.
Pair Corralation between Bank BRISyariah and Aman Agrindo
Assuming the 90 days trading horizon Bank BRISyariah Tbk is expected to generate 2.08 times more return on investment than Aman Agrindo. However, Bank BRISyariah is 2.08 times more volatile than Aman Agrindo. It trades about -0.01 of its potential returns per unit of risk. Aman Agrindo is currently generating about -0.18 per unit of risk. If you would invest 295,000 in Bank BRISyariah Tbk on August 30, 2024 and sell it today you would lose (4,000) from holding Bank BRISyariah Tbk or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank BRISyariah Tbk vs. Aman Agrindo
Performance |
| Timeline |
| Bank BRISyariah Tbk |
| Aman Agrindo |
Bank BRISyariah and Aman Agrindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank BRISyariah and Aman Agrindo
The main advantage of trading using opposite Bank BRISyariah and Aman Agrindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank BRISyariah position performs unexpectedly, Aman Agrindo 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 Aman Agrindo will offset losses from the drop in Aman Agrindo'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 |
| Aman Agrindo vs. Putra Rajawali Kencana | Aman Agrindo vs. Sinergi Inti Plastindo | Aman Agrindo vs. Karya Bersama Anugerah | Aman Agrindo vs. Jasnita Telekomindo Tbk |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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