Correlation Between Indosat Tbk and Bank Negara
Can any of the company-specific risk be diversified away by investing in both Indosat Tbk and Bank Negara 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 Indosat Tbk and Bank Negara into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indosat Tbk and Bank Negara Indonesia, you can compare the effects of market volatilities on Indosat Tbk and Bank Negara 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 Indosat Tbk with a short position of Bank Negara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indosat Tbk and Bank Negara.
Diversification Opportunities for Indosat Tbk and Bank Negara
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indosat and Bank is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Indosat Tbk and Bank Negara Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Negara Indonesia and Indosat Tbk 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 Indosat Tbk are associated (or correlated) with Bank Negara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Negara Indonesia has no effect on the direction of Indosat Tbk i.e., Indosat Tbk and Bank Negara go up and down completely randomly.
Pair Corralation between Indosat Tbk and Bank Negara
Assuming the 90 days trading horizon Indosat Tbk is expected to generate 1.85 times more return on investment than Bank Negara. However, Indosat Tbk is 1.85 times more volatile than Bank Negara Indonesia. It trades about 0.02 of its potential returns per unit of risk. Bank Negara Indonesia is currently generating about -0.1 per unit of risk. If you would invest 243,000 in Indosat Tbk on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Indosat Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indosat Tbk vs. Bank Negara Indonesia
Performance |
| Timeline |
| Indosat Tbk |
| Bank Negara Indonesia |
Indosat Tbk and Bank Negara Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indosat Tbk and Bank Negara
The main advantage of trading using opposite Indosat Tbk and Bank Negara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indosat Tbk position performs unexpectedly, Bank Negara 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 Negara will offset losses from the drop in Bank Negara's long position.| Indosat Tbk vs. Astra Agro Lestari | Indosat Tbk vs. Vale Indonesia Tbk | Indosat Tbk vs. Timah Persero Tbk | Indosat Tbk vs. Medco Energi Internasional |
| Bank Negara vs. Ace Hardware Indonesia | Bank Negara vs. Merdeka Copper Gold | Bank Negara vs. Mitra Pinasthika Mustika | Bank Negara vs. Jakarta Int Hotels |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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