Correlation Between Optima Prima and Bank Nationalnobu
Can any of the company-specific risk be diversified away by investing in both Optima Prima 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 Optima Prima and Bank Nationalnobu 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 Nationalnobu Tbk, you can compare the effects of market volatilities on Optima Prima 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 Optima Prima with a short position of Bank Nationalnobu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Prima and Bank Nationalnobu.
Diversification Opportunities for Optima Prima and Bank Nationalnobu
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Optima and Bank is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Optima Prima Metal 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 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 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 Optima Prima i.e., Optima Prima and Bank Nationalnobu go up and down completely randomly.
Pair Corralation between Optima Prima and Bank Nationalnobu
Assuming the 90 days trading horizon Optima Prima Metal is expected to under-perform the Bank Nationalnobu. In addition to that, Optima Prima is 2.38 times more volatile than Bank Nationalnobu Tbk. It trades about -0.36 of its total potential returns per unit of risk. Bank Nationalnobu Tbk is currently generating about 0.07 per unit of volatility. If you would invest 64,500 in Bank Nationalnobu Tbk on August 30, 2024 and sell it today you would earn a total of 1,500 from holding Bank Nationalnobu Tbk or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optima Prima Metal vs. Bank Nationalnobu Tbk
Performance |
| Timeline |
| Optima Prima Metal |
| Bank Nationalnobu Tbk |
Optima Prima and Bank Nationalnobu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Prima and Bank Nationalnobu
The main advantage of trading using opposite Optima Prima and Bank Nationalnobu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Prima 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.| Optima Prima vs. Gunung Raja Paksi | Optima Prima vs. Emdeki Utama Tbk | Optima Prima vs. Nusantara Almazia | Optima Prima vs. Darmi Bersaudara Tbk |
| Bank Nationalnobu vs. Trinitan Metals and | Bank Nationalnobu vs. Metrodata Electronics Tbk | Bank Nationalnobu vs. Alumindo Light Metal | Bank Nationalnobu vs. Lion Metal Works |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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