Correlation Between PT Trimegah and Bank Central
Can any of the company-specific risk be diversified away by investing in both PT Trimegah and Bank Central 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 PT Trimegah and Bank Central into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Trimegah Bangun and Bank Central Asia, you can compare the effects of market volatilities on PT Trimegah and Bank Central 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 PT Trimegah with a short position of Bank Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Trimegah and Bank Central.
Diversification Opportunities for PT Trimegah and Bank Central
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NCKL and Bank is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding PT Trimegah Bangun and Bank Central Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Central Asia and PT Trimegah 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 PT Trimegah Bangun are associated (or correlated) with Bank Central. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Central Asia has no effect on the direction of PT Trimegah i.e., PT Trimegah and Bank Central go up and down completely randomly.
Pair Corralation between PT Trimegah and Bank Central
Assuming the 90 days trading horizon PT Trimegah Bangun is expected to under-perform the Bank Central. In addition to that, PT Trimegah is 1.2 times more volatile than Bank Central Asia. It trades about -0.19 of its total potential returns per unit of risk. Bank Central Asia is currently generating about -0.07 per unit of volatility. If you would invest 915,000 in Bank Central Asia on November 28, 2024 and sell it today you would lose (27,500) from holding Bank Central Asia or give up 3.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Trimegah Bangun vs. Bank Central Asia
Performance |
| Timeline |
| PT Trimegah Bangun |
| Bank Central Asia |
PT Trimegah and Bank Central Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Trimegah and Bank Central
The main advantage of trading using opposite PT Trimegah and Bank Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Trimegah position performs unexpectedly, Bank Central 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 Central will offset losses from the drop in Bank Central's long position.| PT Trimegah vs. Indonesian Tobacco Tbk | PT Trimegah vs. PT Charlie Hospital | PT Trimegah vs. PT Homeco Victoria | PT Trimegah vs. PT Hatten Bali |
| Bank Central vs. Bank Rakyat Indonesia | Bank Central vs. Bank Mandiri Persero | Bank Central vs. Bank Negara Indonesia | Bank Central vs. Astra International Tbk |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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