Correlation Between Central Proteina and Bank BRISyariah
Can any of the company-specific risk be diversified away by investing in both Central Proteina and Bank BRISyariah 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 Central Proteina and Bank BRISyariah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Proteina Prima and Bank BRISyariah Tbk, you can compare the effects of market volatilities on Central Proteina and Bank BRISyariah 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 Central Proteina with a short position of Bank BRISyariah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Proteina and Bank BRISyariah.
Diversification Opportunities for Central Proteina and Bank BRISyariah
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Central and Bank is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Central Proteina Prima and Bank BRISyariah Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank BRISyariah Tbk and Central Proteina 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 Central Proteina Prima are associated (or correlated) with Bank BRISyariah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank BRISyariah Tbk has no effect on the direction of Central Proteina i.e., Central Proteina and Bank BRISyariah go up and down completely randomly.
Pair Corralation between Central Proteina and Bank BRISyariah
Assuming the 90 days trading horizon Central Proteina is expected to generate 49.07 times less return on investment than Bank BRISyariah. But when comparing it to its historical volatility, Central Proteina Prima is 2.38 times less risky than Bank BRISyariah. It trades about 0.0 of its potential returns per unit of risk. Bank BRISyariah Tbk is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 226,000 in Bank BRISyariah Tbk on September 3, 2024 and sell it today you would earn a total of 64,000 from holding Bank BRISyariah Tbk or generate 28.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Proteina Prima vs. Bank BRISyariah Tbk
Performance |
| Timeline |
| Central Proteina Prima |
| Bank BRISyariah Tbk |
Central Proteina and Bank BRISyariah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Proteina and Bank BRISyariah
The main advantage of trading using opposite Central Proteina and Bank BRISyariah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Proteina position performs unexpectedly, Bank BRISyariah 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 BRISyariah will offset losses from the drop in Bank BRISyariah's long position.| Central Proteina vs. Bakrie Brothers Tbk | Central Proteina vs. Bakrieland Development Tbk | Central Proteina vs. Darma Henwa Tbk | Central Proteina vs. Bakrie Sumatera Plantations |
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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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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