Correlation Between Bank Negara and Avalon Acquisition
Can any of the company-specific risk be diversified away by investing in both Bank Negara and Avalon Acquisition 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 Negara and Avalon Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Negara Indonesia and Avalon Acquisition Warrant, you can compare the effects of market volatilities on Bank Negara and Avalon Acquisition 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 Negara with a short position of Avalon Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Avalon Acquisition.
Diversification Opportunities for Bank Negara and Avalon Acquisition
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Avalon is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Avalon Acquisition Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avalon Acquisition and Bank Negara 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 Negara Indonesia are associated (or correlated) with Avalon Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avalon Acquisition has no effect on the direction of Bank Negara i.e., Bank Negara and Avalon Acquisition go up and down completely randomly.
Pair Corralation between Bank Negara and Avalon Acquisition
If you would invest 11.00 in Avalon Acquisition Warrant on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Avalon Acquisition Warrant or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Bank Negara Indonesia vs. Avalon Acquisition Warrant
Performance |
| Timeline |
| Bank Negara Indonesia |
| Avalon Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Negara and Avalon Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and Avalon Acquisition
The main advantage of trading using opposite Bank Negara and Avalon Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, Avalon Acquisition 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 Avalon Acquisition will offset losses from the drop in Avalon Acquisition's long position.| Bank Negara vs. Banco Bradesco SA | Bank Negara vs. Itau Unibanco Banco | Bank Negara vs. Lloyds Banking Group | Bank Negara vs. Deutsche Bank AG |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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