Correlation Between Bank Tabungan and Indofood Cbp
Can any of the company-specific risk be diversified away by investing in both Bank Tabungan and Indofood Cbp 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 Indofood Cbp 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 Indofood Cbp Sukses, you can compare the effects of market volatilities on Bank Tabungan and Indofood Cbp 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 Indofood Cbp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Tabungan and Indofood Cbp.
Diversification Opportunities for Bank Tabungan and Indofood Cbp
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bank and Indofood is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Bank Tabungan Pensiunan and Indofood Cbp Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indofood Cbp Sukses 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 Indofood Cbp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indofood Cbp Sukses has no effect on the direction of Bank Tabungan i.e., Bank Tabungan and Indofood Cbp go up and down completely randomly.
Pair Corralation between Bank Tabungan and Indofood Cbp
Assuming the 90 days trading horizon Bank Tabungan Pensiunan is expected to under-perform the Indofood Cbp. But the stock apears to be less risky and, when comparing its historical volatility, Bank Tabungan Pensiunan is 1.12 times less risky than Indofood Cbp. The stock trades about -0.49 of its potential returns per unit of risk. The Indofood Cbp Sukses is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 1,265,000 in Indofood Cbp Sukses on August 28, 2024 and sell it today you would lose (70,000) from holding Indofood Cbp Sukses or give up 5.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank Tabungan Pensiunan vs. Indofood Cbp Sukses
Performance |
| Timeline |
| Bank Tabungan Pensiunan |
| Indofood Cbp Sukses |
Bank Tabungan and Indofood Cbp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Tabungan and Indofood Cbp
The main advantage of trading using opposite Bank Tabungan and Indofood Cbp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Tabungan position performs unexpectedly, Indofood Cbp 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 Indofood Cbp will offset losses from the drop in Indofood Cbp's long position.| Bank Tabungan vs. Bank BRISyariah Tbk | Bank Tabungan vs. Ace Hardware Indonesia | Bank Tabungan vs. Merdeka Copper Gold | Bank Tabungan vs. Erajaya Swasembada Tbk |
| Indofood Cbp vs. Unilever Indonesia Tbk | Indofood Cbp vs. PT Indofood Sukses | Indofood Cbp vs. Astra International Tbk | Indofood Cbp vs. Telkom Indonesia 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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