Correlation Between Bank BRISyariah and Pakuwon Jati
Can any of the company-specific risk be diversified away by investing in both Bank BRISyariah and Pakuwon Jati 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 Pakuwon Jati 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 Pakuwon Jati Tbk, you can compare the effects of market volatilities on Bank BRISyariah and Pakuwon Jati 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 Pakuwon Jati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank BRISyariah and Pakuwon Jati.
Diversification Opportunities for Bank BRISyariah and Pakuwon Jati
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bank and Pakuwon is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bank BRISyariah Tbk and Pakuwon Jati Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pakuwon Jati 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 Pakuwon Jati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pakuwon Jati Tbk has no effect on the direction of Bank BRISyariah i.e., Bank BRISyariah and Pakuwon Jati go up and down completely randomly.
Pair Corralation between Bank BRISyariah and Pakuwon Jati
Assuming the 90 days trading horizon Bank BRISyariah Tbk is expected to generate 0.94 times more return on investment than Pakuwon Jati. However, Bank BRISyariah Tbk is 1.06 times less risky than Pakuwon Jati. It trades about 0.19 of its potential returns per unit of risk. Pakuwon Jati Tbk is currently generating about 0.05 per unit of risk. If you would invest 288,000 in Bank BRISyariah Tbk on November 27, 2024 and sell it today you would earn a total of 19,000 from holding Bank BRISyariah Tbk or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank BRISyariah Tbk vs. Pakuwon Jati Tbk
Performance |
| Timeline |
| Bank BRISyariah Tbk |
| Pakuwon Jati Tbk |
Bank BRISyariah and Pakuwon Jati Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank BRISyariah and Pakuwon Jati
The main advantage of trading using opposite Bank BRISyariah and Pakuwon Jati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank BRISyariah position performs unexpectedly, Pakuwon Jati 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 Pakuwon Jati will offset losses from the drop in Pakuwon Jati'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 |
| Pakuwon Jati vs. Bumi Serpong Damai | Pakuwon Jati vs. Ciputra Development Tbk | Pakuwon Jati vs. Summarecon Agung Tbk | Pakuwon Jati vs. Pembangunan Perumahan PT |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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