Correlation Between Bank Pan and PT Cilacap
Can any of the company-specific risk be diversified away by investing in both Bank Pan and PT Cilacap 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 Bank Pan and PT Cilacap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Pan Indonesia and PT Cilacap Samudera, you can compare the effects of market volatilities on Bank Pan and PT Cilacap 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 Bank Pan with a short position of PT Cilacap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Pan and PT Cilacap.
Diversification Opportunities for Bank Pan and PT Cilacap
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and ASHA is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bank Pan Indonesia and PT Cilacap Samudera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Cilacap Samudera and Bank Pan 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 Bank Pan Indonesia are associated (or correlated) with PT Cilacap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Cilacap Samudera has no effect on the direction of Bank Pan i.e., Bank Pan and PT Cilacap go up and down completely randomly.
Pair Corralation between Bank Pan and PT Cilacap
Assuming the 90 days trading horizon Bank Pan Indonesia is expected to generate 0.5 times more return on investment than PT Cilacap. However, Bank Pan Indonesia is 2.01 times less risky than PT Cilacap. It trades about 0.06 of its potential returns per unit of risk. PT Cilacap Samudera is currently generating about -0.1 per unit of risk. If you would invest 114,000 in Bank Pan Indonesia on September 1, 2024 and sell it today you would earn a total of 64,000 from holding Bank Pan Indonesia or generate 56.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Bank Pan Indonesia vs. PT Cilacap Samudera
Performance |
| Timeline |
| Bank Pan Indonesia |
| PT Cilacap Samudera |
Bank Pan and PT Cilacap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Pan and PT Cilacap
The main advantage of trading using opposite Bank Pan and PT Cilacap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Pan position performs unexpectedly, PT Cilacap 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 PT Cilacap will offset losses from the drop in PT Cilacap's long position.| Bank Pan vs. Bank Danamon Indonesia | Bank Pan vs. Bank Cimb Niaga | Bank Pan vs. Panin Financial Tbk | Bank Pan vs. Bank Maybank Indonesia |
| PT Cilacap vs. PT Dewi Shri | PT Cilacap vs. Adaro Minerals Indonesia | PT Cilacap vs. Autopedia Sukses Lestari | PT Cilacap vs. Wir Asia 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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