Correlation Between Kresna Graha and Bank Nationalnobu
Can any of the company-specific risk be diversified away by investing in both Kresna Graha and Bank Nationalnobu 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 Kresna Graha and Bank Nationalnobu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kresna Graha Investama and Bank Nationalnobu Tbk, you can compare the effects of market volatilities on Kresna Graha and Bank Nationalnobu 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 Kresna Graha with a short position of Bank Nationalnobu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kresna Graha and Bank Nationalnobu.
Diversification Opportunities for Kresna Graha and Bank Nationalnobu
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kresna and Bank is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Kresna Graha Investama and Bank Nationalnobu Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Nationalnobu Tbk and Kresna Graha 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 Kresna Graha Investama are associated (or correlated) with Bank Nationalnobu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Nationalnobu Tbk has no effect on the direction of Kresna Graha i.e., Kresna Graha and Bank Nationalnobu go up and down completely randomly.
Pair Corralation between Kresna Graha and Bank Nationalnobu
Assuming the 90 days trading horizon Kresna Graha Investama is expected to under-perform the Bank Nationalnobu. In addition to that, Kresna Graha is 4.47 times more volatile than Bank Nationalnobu Tbk. It trades about -0.05 of its total potential returns per unit of risk. Bank Nationalnobu Tbk is currently generating about -0.03 per unit of volatility. If you would invest 66,000 in Bank Nationalnobu Tbk on August 27, 2024 and sell it today you would lose (1,000.00) from holding Bank Nationalnobu Tbk or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kresna Graha Investama vs. Bank Nationalnobu Tbk
Performance |
| Timeline |
| Kresna Graha Investama |
| Bank Nationalnobu Tbk |
Kresna Graha and Bank Nationalnobu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kresna Graha and Bank Nationalnobu
The main advantage of trading using opposite Kresna Graha and Bank Nationalnobu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kresna Graha position performs unexpectedly, Bank Nationalnobu 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 Nationalnobu will offset losses from the drop in Bank Nationalnobu's long position.The idea behind Kresna Graha Investama and Bank Nationalnobu Tbk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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