Correlation Between Maskapai Reasuransi and Bank Pembangunan
Can any of the company-specific risk be diversified away by investing in both Maskapai Reasuransi and Bank Pembangunan 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 Maskapai Reasuransi and Bank Pembangunan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maskapai Reasuransi Indonesia and Bank Pembangunan Daerah, you can compare the effects of market volatilities on Maskapai Reasuransi and Bank Pembangunan 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 Maskapai Reasuransi with a short position of Bank Pembangunan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maskapai Reasuransi and Bank Pembangunan.
Diversification Opportunities for Maskapai Reasuransi and Bank Pembangunan
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Maskapai and Bank is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Maskapai Reasuransi Indonesia and Bank Pembangunan Daerah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Pembangunan Daerah and Maskapai Reasuransi 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 Maskapai Reasuransi Indonesia are associated (or correlated) with Bank Pembangunan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Pembangunan Daerah has no effect on the direction of Maskapai Reasuransi i.e., Maskapai Reasuransi and Bank Pembangunan go up and down completely randomly.
Pair Corralation between Maskapai Reasuransi and Bank Pembangunan
Assuming the 90 days trading horizon Maskapai Reasuransi Indonesia is expected to under-perform the Bank Pembangunan. But the stock apears to be less risky and, when comparing its historical volatility, Maskapai Reasuransi Indonesia is 1.11 times less risky than Bank Pembangunan. The stock trades about -0.05 of its potential returns per unit of risk. The Bank Pembangunan Daerah is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 5,000 in Bank Pembangunan Daerah on August 24, 2024 and sell it today you would lose (1,600) from holding Bank Pembangunan Daerah or give up 32.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maskapai Reasuransi Indonesia vs. Bank Pembangunan Daerah
Performance |
| Timeline |
| Maskapai Reasuransi |
| Bank Pembangunan Daerah |
Maskapai Reasuransi and Bank Pembangunan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maskapai Reasuransi and Bank Pembangunan
The main advantage of trading using opposite Maskapai Reasuransi and Bank Pembangunan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maskapai Reasuransi position performs unexpectedly, Bank Pembangunan 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 Pembangunan will offset losses from the drop in Bank Pembangunan's long position.| Maskapai Reasuransi vs. Lippo General Insurance | Maskapai Reasuransi vs. Paninvest Tbk | Maskapai Reasuransi vs. Mandala Multifinance Tbk | Maskapai Reasuransi vs. Bank Mayapada Internasional |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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