Correlation Between Bank BRISyariah and Inocycle Technology
Can any of the company-specific risk be diversified away by investing in both Bank BRISyariah and Inocycle Technology 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 Inocycle Technology 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 Inocycle Technology Tbk, you can compare the effects of market volatilities on Bank BRISyariah and Inocycle Technology 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 Inocycle Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank BRISyariah and Inocycle Technology.
Diversification Opportunities for Bank BRISyariah and Inocycle Technology
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Inocycle is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bank BRISyariah Tbk and Inocycle Technology Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inocycle Technology 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 Inocycle Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inocycle Technology Tbk has no effect on the direction of Bank BRISyariah i.e., Bank BRISyariah and Inocycle Technology go up and down completely randomly.
Pair Corralation between Bank BRISyariah and Inocycle Technology
Assuming the 90 days trading horizon Bank BRISyariah Tbk is expected to generate 1.17 times more return on investment than Inocycle Technology. However, Bank BRISyariah is 1.17 times more volatile than Inocycle Technology Tbk. It trades about -0.02 of its potential returns per unit of risk. Inocycle Technology Tbk is currently generating about -0.23 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank BRISyariah Tbk vs. Inocycle Technology Tbk
Performance |
| Timeline |
| Bank BRISyariah Tbk |
| Inocycle Technology Tbk |
Bank BRISyariah and Inocycle Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank BRISyariah and Inocycle Technology
The main advantage of trading using opposite Bank BRISyariah and Inocycle Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank BRISyariah position performs unexpectedly, Inocycle Technology 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 Inocycle Technology will offset losses from the drop in Inocycle Technology'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 |
| Inocycle Technology vs. MNC Vision Networks | Inocycle Technology vs. Hartadinata Abadi Tbk | Inocycle Technology vs. Kencana Energi Lestari | Inocycle Technology vs. Bali Bintang Sejahtera |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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