Correlation Between Clipan Finance and Bank Permata
Can any of the company-specific risk be diversified away by investing in both Clipan Finance 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 Clipan Finance and Bank Permata into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clipan Finance Indonesia and Bank Permata Tbk, you can compare the effects of market volatilities on Clipan Finance 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 Clipan Finance with a short position of Bank Permata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clipan Finance and Bank Permata.
Diversification Opportunities for Clipan Finance and Bank Permata
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Clipan and Bank is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Clipan Finance Indonesia 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 Clipan Finance 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 Clipan Finance Indonesia 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 Clipan Finance i.e., Clipan Finance and Bank Permata go up and down completely randomly.
Pair Corralation between Clipan Finance and Bank Permata
Assuming the 90 days trading horizon Clipan Finance Indonesia is expected to under-perform the Bank Permata. But the stock apears to be less risky and, when comparing its historical volatility, Clipan Finance Indonesia is 1.15 times less risky than Bank Permata. The stock trades about -0.16 of its potential returns per unit of risk. The Bank Permata Tbk is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 120,000 in Bank Permata Tbk on October 26, 2024 and sell it today you would earn a total of 9,500 from holding Bank Permata Tbk or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clipan Finance Indonesia vs. Bank Permata Tbk
Performance |
| Timeline |
| Clipan Finance Indonesia |
| Bank Permata Tbk |
Clipan Finance and Bank Permata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clipan Finance and Bank Permata
The main advantage of trading using opposite Clipan Finance and Bank Permata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clipan Finance 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.| Clipan Finance vs. BFI Finance Indonesia | Clipan Finance vs. Adira Dinamika Multi | Clipan Finance vs. Paninvest Tbk | Clipan Finance vs. Panin Financial Tbk |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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