Correlation Between Bank Victoria and Bank JTrust
Can any of the company-specific risk be diversified away by investing in both Bank Victoria and Bank JTrust 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 Victoria and Bank JTrust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Victoria International and Bank JTrust Indonesia, you can compare the effects of market volatilities on Bank Victoria and Bank JTrust 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 Victoria with a short position of Bank JTrust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Victoria and Bank JTrust.
Diversification Opportunities for Bank Victoria and Bank JTrust
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Bank is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bank Victoria International and Bank JTrust Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank JTrust Indonesia and Bank Victoria 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 Victoria International are associated (or correlated) with Bank JTrust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank JTrust Indonesia has no effect on the direction of Bank Victoria i.e., Bank Victoria and Bank JTrust go up and down completely randomly.
Pair Corralation between Bank Victoria and Bank JTrust
Assuming the 90 days trading horizon Bank Victoria International is expected to generate 0.73 times more return on investment than Bank JTrust. However, Bank Victoria International is 1.37 times less risky than Bank JTrust. It trades about -0.05 of its potential returns per unit of risk. Bank JTrust Indonesia is currently generating about -0.07 per unit of risk. If you would invest 10,100 in Bank Victoria International on August 27, 2024 and sell it today you would lose (400.00) from holding Bank Victoria International or give up 3.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Victoria International vs. Bank JTrust Indonesia
Performance |
| Timeline |
| Bank Victoria Intern |
| Bank JTrust Indonesia |
Bank Victoria and Bank JTrust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Victoria and Bank JTrust
The main advantage of trading using opposite Bank Victoria and Bank JTrust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Victoria position performs unexpectedly, Bank JTrust 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 JTrust will offset losses from the drop in Bank JTrust's long position.| Bank Victoria vs. Bank Qnb Indonesia | Bank Victoria vs. Bank Mnc Internasional | Bank Victoria vs. Bank Bumi Arta | Bank Victoria vs. Bank Capital Indonesia |
| Bank JTrust vs. Bank Victoria International | Bank JTrust vs. Bank Maybank Indonesia | Bank JTrust vs. Bank Qnb Indonesia | Bank JTrust vs. Bank Bumi Arta |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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