Correlation Between Capital Income and Bank Mega
Can any of the company-specific risk be diversified away by investing in both Capital Income and Bank Mega 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 Capital Income and Bank Mega into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Income Builder and Bank Mega Tbk, you can compare the effects of market volatilities on Capital Income and Bank Mega 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 Capital Income with a short position of Bank Mega. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Income and Bank Mega.
Diversification Opportunities for Capital Income and Bank Mega
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capital and Bank is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Capital Income Builder and Bank Mega Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mega Tbk and Capital Income 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 Capital Income Builder are associated (or correlated) with Bank Mega. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mega Tbk has no effect on the direction of Capital Income i.e., Capital Income and Bank Mega go up and down completely randomly.
Pair Corralation between Capital Income and Bank Mega
Assuming the 90 days horizon Capital Income Builder is expected to generate 0.21 times more return on investment than Bank Mega. However, Capital Income Builder is 4.72 times less risky than Bank Mega. It trades about 0.23 of its potential returns per unit of risk. Bank Mega Tbk is currently generating about -0.14 per unit of risk. If you would invest 6,924 in Capital Income Builder on November 4, 2024 and sell it today you would earn a total of 175.00 from holding Capital Income Builder or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Capital Income Builder vs. Bank Mega Tbk
Performance |
| Timeline |
| Capital Income Builder |
| Bank Mega Tbk |
Capital Income and Bank Mega Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Income and Bank Mega
The main advantage of trading using opposite Capital Income and Bank Mega positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Income position performs unexpectedly, Bank Mega 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 Mega will offset losses from the drop in Bank Mega's long position.| Capital Income vs. Dws Global Macro | Capital Income vs. Rbb Fund | Capital Income vs. Kinetics Global Fund | Capital Income vs. Ms Global Fixed |
| Bank Mega vs. Bank Ocbc Nisp | Bank Mega vs. Bank Mayapada Internasional | Bank Mega vs. Bank Permata Tbk | Bank Mega 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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