Correlation Between Bank Pan and Bank Pembangunan
Can any of the company-specific risk be diversified away by investing in both Bank Pan and Bank Pembangunan 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 Bank Pembangunan 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 Bank Pembangunan Daerah, you can compare the effects of market volatilities on Bank Pan and Bank Pembangunan 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 Bank Pembangunan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Pan and Bank Pembangunan.
Diversification Opportunities for Bank Pan and Bank Pembangunan
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Bank is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bank Pan Indonesia and Bank Pembangunan Daerah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Pembangunan Daerah 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 Bank Pembangunan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Pembangunan Daerah has no effect on the direction of Bank Pan i.e., Bank Pan and Bank Pembangunan go up and down completely randomly.
Pair Corralation between Bank Pan and Bank Pembangunan
Assuming the 90 days trading horizon Bank Pan Indonesia is expected to generate 0.74 times more return on investment than Bank Pembangunan. However, Bank Pan Indonesia is 1.35 times less risky than Bank Pembangunan. It trades about 0.03 of its potential returns per unit of risk. Bank Pembangunan Daerah is currently generating about -0.02 per unit of risk. If you would invest 144,500 in Bank Pan Indonesia on November 19, 2024 and sell it today you would earn a total of 30,500 from holding Bank Pan Indonesia or generate 21.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Bank Pan Indonesia vs. Bank Pembangunan Daerah
Performance |
| Timeline |
| Bank Pan Indonesia |
| Bank Pembangunan Daerah |
Bank Pan and Bank Pembangunan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Pan and Bank Pembangunan
The main advantage of trading using opposite Bank Pan and Bank Pembangunan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Pan position performs unexpectedly, Bank Pembangunan 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 Pembangunan will offset losses from the drop in Bank Pembangunan'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 |
| Bank Pembangunan vs. Bank Mnc Internasional | Bank Pembangunan vs. Bank Qnb Indonesia | Bank Pembangunan vs. Bank Victoria International | Bank Pembangunan vs. Bank Rakyat Indonesia |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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