Correlation Between Bank Negara and AVROBIO
Can any of the company-specific risk be diversified away by investing in both Bank Negara and AVROBIO 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 AVROBIO 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 AVROBIO, you can compare the effects of market volatilities on Bank Negara and AVROBIO 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 AVROBIO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and AVROBIO.
Diversification Opportunities for Bank Negara and AVROBIO
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and AVROBIO is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and AVROBIO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVROBIO 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 AVROBIO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVROBIO has no effect on the direction of Bank Negara i.e., Bank Negara and AVROBIO go up and down completely randomly.
Pair Corralation between Bank Negara and AVROBIO
Assuming the 90 days horizon Bank Negara is expected to generate 2.09 times less return on investment than AVROBIO. But when comparing it to its historical volatility, Bank Negara Indonesia is 1.37 times less risky than AVROBIO. It trades about 0.03 of its potential returns per unit of risk. AVROBIO is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 78.00 in AVROBIO on September 12, 2024 and sell it today you would earn a total of 62.00 from holding AVROBIO or generate 79.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 75.91% |
| Values | Daily Returns |
Bank Negara Indonesia vs. AVROBIO
Performance |
| Timeline |
| Bank Negara Indonesia |
| AVROBIO |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Negara and AVROBIO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and AVROBIO
The main advantage of trading using opposite Bank Negara and AVROBIO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, AVROBIO 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 AVROBIO will offset losses from the drop in AVROBIO'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 |
| AVROBIO vs. Ocean Biomedical | AVROBIO vs. Enveric Biosciences | AVROBIO vs. Elevation Oncology | AVROBIO vs. Zura Bio Limited |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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