Correlation Between Perusahaan Gas and Bank Central
Can any of the company-specific risk be diversified away by investing in both Perusahaan Gas 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 Perusahaan Gas and Bank Central into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perusahaan Gas Negara and Bank Central Asia, you can compare the effects of market volatilities on Perusahaan Gas 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 Perusahaan Gas with a short position of Bank Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Gas and Bank Central.
Diversification Opportunities for Perusahaan Gas and Bank Central
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Perusahaan and Bank is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Gas Negara 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 Perusahaan Gas 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 Perusahaan Gas Negara 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 Perusahaan Gas i.e., Perusahaan Gas and Bank Central go up and down completely randomly.
Pair Corralation between Perusahaan Gas and Bank Central
Assuming the 90 days trading horizon Perusahaan Gas is expected to generate 2.35 times less return on investment than Bank Central. In addition to that, Perusahaan Gas is 1.39 times more volatile than Bank Central Asia. It trades about 0.01 of its total potential returns per unit of risk. Bank Central Asia is currently generating about 0.05 per unit of volatility. If you would invest 801,935 in Bank Central Asia on August 28, 2024 and sell it today you would earn a total of 215,565 from holding Bank Central Asia or generate 26.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Perusahaan Gas Negara vs. Bank Central Asia
Performance |
| Timeline |
| Perusahaan Gas Negara |
| Bank Central Asia |
Perusahaan Gas and Bank Central Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perusahaan Gas and Bank Central
The main advantage of trading using opposite Perusahaan Gas and Bank Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perusahaan Gas 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.| Perusahaan Gas vs. Aneka Tambang Persero | Perusahaan Gas vs. Bukit Asam Tbk | Perusahaan Gas vs. Telkom Indonesia Tbk | Perusahaan Gas vs. Astra International Tbk |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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