Correlation Between Bank BRISyariah and Tanah Laut
Can any of the company-specific risk be diversified away by investing in both Bank BRISyariah and Tanah Laut 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 Tanah Laut 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 Tanah Laut Tbk, you can compare the effects of market volatilities on Bank BRISyariah and Tanah Laut 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 Tanah Laut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank BRISyariah and Tanah Laut.
Diversification Opportunities for Bank BRISyariah and Tanah Laut
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Tanah is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bank BRISyariah Tbk and Tanah Laut Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanah Laut Tbk 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 Tanah Laut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanah Laut Tbk has no effect on the direction of Bank BRISyariah i.e., Bank BRISyariah and Tanah Laut go up and down completely randomly.
Pair Corralation between Bank BRISyariah and Tanah Laut
Assuming the 90 days trading horizon Bank BRISyariah Tbk is expected to generate 0.62 times more return on investment than Tanah Laut. However, Bank BRISyariah Tbk is 1.6 times less risky than Tanah Laut. It trades about 0.08 of its potential returns per unit of risk. Tanah Laut Tbk is currently generating about -0.03 per unit of risk. If you would invest 137,097 in Bank BRISyariah Tbk on November 5, 2024 and sell it today you would earn a total of 157,903 from holding Bank BRISyariah Tbk or generate 115.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank BRISyariah Tbk vs. Tanah Laut Tbk
Performance |
| Timeline |
| Bank BRISyariah Tbk |
| Tanah Laut Tbk |
Bank BRISyariah and Tanah Laut Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank BRISyariah and Tanah Laut
The main advantage of trading using opposite Bank BRISyariah and Tanah Laut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank BRISyariah position performs unexpectedly, Tanah Laut 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 Tanah Laut will offset losses from the drop in Tanah Laut'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 |
| Tanah Laut vs. Inter Delta Tbk | Tanah Laut vs. Humpuss Intermoda Transportasi | Tanah Laut vs. Fortune Indonesia Tbk | Tanah Laut vs. PT MNC Energy |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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