Correlation Between Bank Tabungan and Bank Permata
Can any of the company-specific risk be diversified away by investing in both Bank Tabungan and Bank Permata 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 Tabungan and Bank Permata into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Tabungan Pensiunan and Bank Permata Tbk, you can compare the effects of market volatilities on Bank Tabungan and Bank Permata 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 Tabungan with a short position of Bank Permata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Tabungan and Bank Permata.
Diversification Opportunities for Bank Tabungan and Bank Permata
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and Bank is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bank Tabungan Pensiunan and Bank Permata Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Permata Tbk and Bank Tabungan 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 Tabungan Pensiunan are associated (or correlated) with Bank Permata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Permata Tbk has no effect on the direction of Bank Tabungan i.e., Bank Tabungan and Bank Permata go up and down completely randomly.
Pair Corralation between Bank Tabungan and Bank Permata
Assuming the 90 days trading horizon Bank Tabungan Pensiunan is expected to generate 0.64 times more return on investment than Bank Permata. However, Bank Tabungan Pensiunan is 1.57 times less risky than Bank Permata. It trades about 0.03 of its potential returns per unit of risk. Bank Permata Tbk is currently generating about -0.39 per unit of risk. If you would invest 227,000 in Bank Tabungan Pensiunan on September 1, 2024 and sell it today you would earn a total of 2,000 from holding Bank Tabungan Pensiunan or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank Tabungan Pensiunan vs. Bank Permata Tbk
Performance |
| Timeline |
| Bank Tabungan Pensiunan |
| Bank Permata Tbk |
Bank Tabungan and Bank Permata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Tabungan and Bank Permata
The main advantage of trading using opposite Bank Tabungan and Bank Permata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Tabungan position performs unexpectedly, Bank Permata 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 Bank Permata will offset losses from the drop in Bank Permata's long position.| Bank Tabungan vs. Bank BRISyariah Tbk | Bank Tabungan vs. Ace Hardware Indonesia | Bank Tabungan vs. Merdeka Copper Gold | Bank Tabungan vs. Mitra Pinasthika Mustika |
| Bank Permata vs. Bank Cimb Niaga | Bank Permata vs. Bank Maybank Indonesia | Bank Permata vs. Bank Danamon Indonesia | Bank Permata vs. Bank Pan Indonesia |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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