Correlation Between Bank Negara and Kambi Group
Can any of the company-specific risk be diversified away by investing in both Bank Negara and Kambi Group 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 Kambi Group 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 Kambi Group plc, you can compare the effects of market volatilities on Bank Negara and Kambi Group 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 Kambi Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Negara and Kambi Group.
Diversification Opportunities for Bank Negara and Kambi Group
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Kambi is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bank Negara Indonesia and Kambi Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kambi Group plc 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 Kambi Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kambi Group plc has no effect on the direction of Bank Negara i.e., Bank Negara and Kambi Group go up and down completely randomly.
Pair Corralation between Bank Negara and Kambi Group
Assuming the 90 days horizon Bank Negara Indonesia is expected to generate 2.04 times more return on investment than Kambi Group. However, Bank Negara is 2.04 times more volatile than Kambi Group plc. It trades about 0.03 of its potential returns per unit of risk. Kambi Group plc is currently generating about -0.03 per unit of risk. If you would invest 1,560 in Bank Negara Indonesia on November 2, 2024 and sell it today you would lose (68.00) from holding Bank Negara Indonesia or give up 4.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Negara Indonesia vs. Kambi Group plc
Performance |
| Timeline |
| Bank Negara Indonesia |
| Kambi Group plc |
Bank Negara and Kambi Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Negara and Kambi Group
The main advantage of trading using opposite Bank Negara and Kambi Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Negara position performs unexpectedly, Kambi Group 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 Kambi Group will offset losses from the drop in Kambi Group'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 |
| Kambi Group vs. Light Wonder | Kambi Group vs. Everi Holdings | Kambi Group vs. PlayAGS | Kambi Group vs. Accel Entertainment |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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