Correlation Between Bank Negara and Carbios SAS
Can any of the company-specific risk be diversified away by investing in both Bank Negara and Carbios SAS 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 Carbios SAS 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 Carbios SAS, you can compare the effects of market volatilities on Bank Negara and Carbios SAS 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 Carbios SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Carbios SAS.
Diversification Opportunities for Bank Negara and Carbios SAS
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Carbios is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Carbios SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carbios SAS 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 Carbios SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carbios SAS has no effect on the direction of Bank Negara i.e., Bank Negara and Carbios SAS go up and down completely randomly.
Pair Corralation between Bank Negara and Carbios SAS
Assuming the 90 days horizon Bank Negara Indonesia is expected to under-perform the Carbios SAS. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Negara Indonesia is 1.65 times less risky than Carbios SAS. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Carbios SAS is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 837.00 in Carbios SAS on September 15, 2024 and sell it today you would earn a total of 94.00 from holding Carbios SAS or generate 11.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Negara Indonesia vs. Carbios SAS
Performance |
| Timeline |
| Bank Negara Indonesia |
| Carbios SAS |
Bank Negara and Carbios SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and Carbios SAS
The main advantage of trading using opposite Bank Negara and Carbios SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, Carbios SAS 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 Carbios SAS will offset losses from the drop in Carbios SAS's long position.| Bank Negara vs. PT Bank Rakyat | Bank Negara vs. Morningstar Unconstrained Allocation | Bank Negara vs. Bondbloxx ETF Trust | Bank Negara vs. Spring Valley Acquisition |
| Carbios SAS vs. Chemours Co | Carbios SAS vs. International Flavors Fragrances | Carbios SAS vs. Air Products and | Carbios SAS vs. PPG Industries |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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