Correlation Between Meta Epsi and Bank Pembangunan
Can any of the company-specific risk be diversified away by investing in both Meta Epsi 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 Meta Epsi and Bank Pembangunan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Epsi Tbk and Bank Pembangunan Timur, you can compare the effects of market volatilities on Meta Epsi 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 Meta Epsi with a short position of Bank Pembangunan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Epsi and Bank Pembangunan.
Diversification Opportunities for Meta Epsi and Bank Pembangunan
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Meta and Bank is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Meta Epsi Tbk and Bank Pembangunan Timur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Pembangunan Timur and Meta Epsi 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 Meta Epsi Tbk 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 Timur has no effect on the direction of Meta Epsi i.e., Meta Epsi and Bank Pembangunan go up and down completely randomly.
Pair Corralation between Meta Epsi and Bank Pembangunan
Assuming the 90 days trading horizon Meta Epsi is expected to generate 1.34 times less return on investment than Bank Pembangunan. In addition to that, Meta Epsi is 4.52 times more volatile than Bank Pembangunan Timur. It trades about 0.03 of its total potential returns per unit of risk. Bank Pembangunan Timur is currently generating about 0.16 per unit of volatility. If you would invest 55,000 in Bank Pembangunan Timur on November 2, 2024 and sell it today you would earn a total of 2,000 from holding Bank Pembangunan Timur or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Meta Epsi Tbk vs. Bank Pembangunan Timur
Performance |
| Timeline |
| Meta Epsi Tbk |
| Bank Pembangunan Timur |
Meta Epsi and Bank Pembangunan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Epsi and Bank Pembangunan
The main advantage of trading using opposite Meta Epsi and Bank Pembangunan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Epsi 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.| Meta Epsi vs. Indo Kordsa Tbk | Meta Epsi vs. Wilmar Cahaya Indonesia | Meta Epsi vs. Citra Marga Nusaphala | Meta Epsi vs. Darya Varia Laboratoria Tbk |
| Bank Pembangunan vs. Bank Jabar | Bank Pembangunan vs. Sido Muncul PT | Bank Pembangunan vs. Bank Negara Indonesia | Bank Pembangunan vs. Bank Tabungan Negara |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |