Correlation Between Bank BRISyariah and Perusahaan Perkebunan
Can any of the company-specific risk be diversified away by investing in both Bank BRISyariah and Perusahaan Perkebunan 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 Perusahaan Perkebunan 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 Perusahaan Perkebunan London, you can compare the effects of market volatilities on Bank BRISyariah and Perusahaan Perkebunan 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 Perusahaan Perkebunan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank BRISyariah and Perusahaan Perkebunan.
Diversification Opportunities for Bank BRISyariah and Perusahaan Perkebunan
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Perusahaan is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bank BRISyariah Tbk and Perusahaan Perkebunan London in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perusahaan Perkebunan 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 Perusahaan Perkebunan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perusahaan Perkebunan has no effect on the direction of Bank BRISyariah i.e., Bank BRISyariah and Perusahaan Perkebunan go up and down completely randomly.
Pair Corralation between Bank BRISyariah and Perusahaan Perkebunan
Assuming the 90 days trading horizon Bank BRISyariah Tbk is expected to generate 0.84 times more return on investment than Perusahaan Perkebunan. However, Bank BRISyariah Tbk is 1.19 times less risky than Perusahaan Perkebunan. It trades about -0.02 of its potential returns per unit of risk. Perusahaan Perkebunan London is currently generating about -0.1 per unit of risk. If you would invest 295,000 in Bank BRISyariah Tbk on September 2, 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank BRISyariah Tbk vs. Perusahaan Perkebunan London
Performance |
| Timeline |
| Bank BRISyariah Tbk |
| Perusahaan Perkebunan |
Bank BRISyariah and Perusahaan Perkebunan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank BRISyariah and Perusahaan Perkebunan
The main advantage of trading using opposite Bank BRISyariah and Perusahaan Perkebunan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank BRISyariah position performs unexpectedly, Perusahaan Perkebunan 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 Perusahaan Perkebunan will offset losses from the drop in Perusahaan Perkebunan'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 |
| Perusahaan Perkebunan vs. Bank BRISyariah Tbk | Perusahaan Perkebunan vs. Mitra Pinasthika Mustika | Perusahaan Perkebunan vs. Jakarta Int Hotels | Perusahaan Perkebunan vs. Indosterling Technomedia 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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