Correlation Between Bank BRISyariah and Verena Multi
Can any of the company-specific risk be diversified away by investing in both Bank BRISyariah and Verena Multi 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 Verena Multi 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 Verena Multi Finance, you can compare the effects of market volatilities on Bank BRISyariah and Verena Multi 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 Verena Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank BRISyariah and Verena Multi.
Diversification Opportunities for Bank BRISyariah and Verena Multi
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Verena is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bank BRISyariah Tbk and Verena Multi Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verena Multi Finance 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 Verena Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verena Multi Finance has no effect on the direction of Bank BRISyariah i.e., Bank BRISyariah and Verena Multi go up and down completely randomly.
Pair Corralation between Bank BRISyariah and Verena Multi
Assuming the 90 days trading horizon Bank BRISyariah Tbk is expected to generate 1.62 times more return on investment than Verena Multi. However, Bank BRISyariah is 1.62 times more volatile than Verena Multi Finance. It trades about 0.0 of its potential returns per unit of risk. Verena Multi Finance is currently generating about -0.04 per unit of risk. If you would invest 288,000 in Bank BRISyariah Tbk on November 29, 2024 and sell it today you would lose (2,000) from holding Bank BRISyariah Tbk or give up 0.69% 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. Verena Multi Finance
Performance |
| Timeline |
| Bank BRISyariah Tbk |
| Verena Multi Finance |
Bank BRISyariah and Verena Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank BRISyariah and Verena Multi
The main advantage of trading using opposite Bank BRISyariah and Verena Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank BRISyariah position performs unexpectedly, Verena Multi 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 Verena Multi will offset losses from the drop in Verena Multi'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 |
| Verena Multi vs. Wahana Ottomitra Multiartha | Verena Multi vs. Trust Finance Indonesia | Verena Multi vs. Yulie Sekurindo Tbk | Verena Multi vs. Bank Woori Saudara |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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