Correlation Between Optima Prima and Bank Artos
Can any of the company-specific risk be diversified away by investing in both Optima Prima and Bank Artos 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 Optima Prima and Bank Artos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optima Prima Metal and Bank Artos Indonesia, you can compare the effects of market volatilities on Optima Prima and Bank Artos 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 Optima Prima with a short position of Bank Artos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Prima and Bank Artos.
Diversification Opportunities for Optima Prima and Bank Artos
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Optima and Bank is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Optima Prima Metal and Bank Artos Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Artos Indonesia and Optima Prima 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 Optima Prima Metal are associated (or correlated) with Bank Artos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Artos Indonesia has no effect on the direction of Optima Prima i.e., Optima Prima and Bank Artos go up and down completely randomly.
Pair Corralation between Optima Prima and Bank Artos
Assuming the 90 days trading horizon Optima Prima Metal is expected to under-perform the Bank Artos. In addition to that, Optima Prima is 1.62 times more volatile than Bank Artos Indonesia. It trades about -0.43 of its total potential returns per unit of risk. Bank Artos Indonesia is currently generating about -0.13 per unit of volatility. If you would invest 296,000 in Bank Artos Indonesia on August 24, 2024 and sell it today you would lose (23,000) from holding Bank Artos Indonesia or give up 7.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optima Prima Metal vs. Bank Artos Indonesia
Performance |
| Timeline |
| Optima Prima Metal |
| Bank Artos Indonesia |
Optima Prima and Bank Artos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Prima and Bank Artos
The main advantage of trading using opposite Optima Prima and Bank Artos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Prima position performs unexpectedly, Bank Artos 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 Artos will offset losses from the drop in Bank Artos' long position.| Optima Prima vs. Emdeki Utama Tbk | Optima Prima vs. Nusantara Almazia | Optima Prima vs. Sentral Mitra Informatika | Optima Prima vs. Integra Indocabinet Tbk |
| Bank Artos vs. Elang Mahkota Teknologi | Bank Artos vs. Bank Yudha Bhakti | Bank Artos vs. Bk Harda Internasional | Bank Artos vs. PT Bukalapak |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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