Correlation Between Bank Tabungan and Buyung Poetra
Can any of the company-specific risk be diversified away by investing in both Bank Tabungan and Buyung Poetra 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 Buyung Poetra 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 Buyung Poetra Sembada, you can compare the effects of market volatilities on Bank Tabungan and Buyung Poetra 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 Buyung Poetra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Tabungan and Buyung Poetra.
Diversification Opportunities for Bank Tabungan and Buyung Poetra
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Buyung is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bank Tabungan Pensiunan and Buyung Poetra Sembada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buyung Poetra Sembada 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 Buyung Poetra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buyung Poetra Sembada has no effect on the direction of Bank Tabungan i.e., Bank Tabungan and Buyung Poetra go up and down completely randomly.
Pair Corralation between Bank Tabungan and Buyung Poetra
Assuming the 90 days trading horizon Bank Tabungan Pensiunan is expected to under-perform the Buyung Poetra. But the stock apears to be less risky and, when comparing its historical volatility, Bank Tabungan Pensiunan is 1.62 times less risky than Buyung Poetra. The stock trades about -0.07 of its potential returns per unit of risk. The Buyung Poetra Sembada is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8,825 in Buyung Poetra Sembada on August 31, 2024 and sell it today you would earn a total of 3,575 from holding Buyung Poetra Sembada or generate 40.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Tabungan Pensiunan vs. Buyung Poetra Sembada
Performance |
| Timeline |
| Bank Tabungan Pensiunan |
| Buyung Poetra Sembada |
Bank Tabungan and Buyung Poetra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Tabungan and Buyung Poetra
The main advantage of trading using opposite Bank Tabungan and Buyung Poetra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Tabungan position performs unexpectedly, Buyung Poetra 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 Buyung Poetra will offset losses from the drop in Buyung Poetra'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 |
| Buyung Poetra vs. Bank BRISyariah Tbk | Buyung Poetra vs. Mitra Pinasthika Mustika | Buyung Poetra vs. Jakarta Int Hotels | Buyung Poetra 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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