Correlation Between Bank Negara and Character
Can any of the company-specific risk be diversified away by investing in both Bank Negara and Character 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 Character 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 The Character Group, you can compare the effects of market volatilities on Bank Negara and Character 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 Character. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Character.
Diversification Opportunities for Bank Negara and Character
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Character is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and The Character Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Character Group 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 Character. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Character Group has no effect on the direction of Bank Negara i.e., Bank Negara and Character go up and down completely randomly.
Pair Corralation between Bank Negara and Character
Assuming the 90 days horizon Bank Negara Indonesia is expected to under-perform the Character. In addition to that, Bank Negara is 60.26 times more volatile than The Character Group. It trades about -0.05 of its total potential returns per unit of risk. The Character Group is currently generating about 0.22 per unit of volatility. If you would invest 325.00 in The Character Group on September 2, 2024 and sell it today you would earn a total of 1.00 from holding The Character Group or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Negara Indonesia vs. The Character Group
Performance |
| Timeline |
| Bank Negara Indonesia |
| Character Group |
Bank Negara and Character Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and Character
The main advantage of trading using opposite Bank Negara and Character positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, Character 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 Character will offset losses from the drop in Character's long position.| Bank Negara vs. Piraeus Bank SA | Bank Negara vs. Turkiye Garanti Bankasi | Bank Negara vs. Uwharrie Capital Corp |
| Character vs. American Outdoor Brands | Character vs. Clarus Corp | Character vs. Escalade Incorporated | Character vs. Johnson Outdoors |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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