Correlation Between Indorama Synthetics and PT Bank
Can any of the company-specific risk be diversified away by investing in both Indorama Synthetics and PT Bank 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 Indorama Synthetics and PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indorama Synthetics Tbk and PT Bank Bisnis, you can compare the effects of market volatilities on Indorama Synthetics and PT Bank 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 Indorama Synthetics with a short position of PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indorama Synthetics and PT Bank.
Diversification Opportunities for Indorama Synthetics and PT Bank
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Indorama and BBSI is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Indorama Synthetics Tbk and PT Bank Bisnis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Bisnis and Indorama Synthetics 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 Indorama Synthetics Tbk are associated (or correlated) with PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Bisnis has no effect on the direction of Indorama Synthetics i.e., Indorama Synthetics and PT Bank go up and down completely randomly.
Pair Corralation between Indorama Synthetics and PT Bank
Assuming the 90 days trading horizon Indorama Synthetics Tbk is expected to under-perform the PT Bank. In addition to that, Indorama Synthetics is 1.15 times more volatile than PT Bank Bisnis. It trades about -0.21 of its total potential returns per unit of risk. PT Bank Bisnis is currently generating about -0.04 per unit of volatility. If you would invest 427,000 in PT Bank Bisnis on September 1, 2024 and sell it today you would lose (7,000) from holding PT Bank Bisnis or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indorama Synthetics Tbk vs. PT Bank Bisnis
Performance |
| Timeline |
| Indorama Synthetics Tbk |
| PT Bank Bisnis |
Indorama Synthetics and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indorama Synthetics and PT Bank
The main advantage of trading using opposite Indorama Synthetics and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indorama Synthetics position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| Indorama Synthetics vs. Japfa Comfeed Indonesia | Indorama Synthetics vs. Charoen Pokphand Indonesia | Indorama Synthetics vs. Erajaya Swasembada Tbk | Indorama Synthetics vs. Indofood Cbp Sukses |
| PT Bank vs. Bk Harda Internasional | PT Bank vs. Bank Yudha Bhakti | PT Bank vs. Bank Net Indonesia | PT Bank vs. Bank Amar 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 Stocks Directory module to find actively traded stocks across global markets.
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